Government to off-load stake in SBI

SBIThe central Government is planning to off-load its stake in the country's largest lender the State Bank of India (SBI) to 51 per cent. A bill regarding the same was presented by finance minister Mr. Panab Mukherjee in the Lok Sabha on Monday.

The government at present holds 55 per cent stake in the bank.

If cleared in the present form, the State Bank of India (Amendment) Bill, 2010 presented, the bank would be able to raise additional capital by issuing preference shares. Earlier in 1993 the SBI Act, 1955 was amended to enable the bank to raise funds from capital market.

The bill further added, "The amendment bill seeks to provide for enhancement of the capital of State Bank by issue of preference shares, to enable it to raise resources from the market by public issue or preferential allotment or private placement."

The bill suggests to increase the bank's authorized capital to Rs. 5,000 crore and offers the government the flexibility to increase or decrease the same after consulting with the RBI. The bill will also propose higher freedom in the banks management.