Centre likely to remove 10% shareholding cap for individuals in PSBs

Removal of threshold may allow PE firms to own over 10% stake in state-run banks

The Centre is seeking to remove the 10 per cent shareholding cap for individuals in public sector banks (PSBs) — a move that will enable private equity (PE) firms to pick up stakes in PSBs on the block for privatisation.

The government may propose changes through the Banking Laws (Amendment) Bill that seeks to bring changes to the Banking Companies (Acquisition and Transfer of Undertakings) Act and the Banking Regulation Act.

The proposed amendment to the Banking Regulation Act seeks to remove the 10 per cent ceiling for individuals in the paid-up capital of state-owned banks.

Removing the shareholding cap