Public sector banks and financial institutions were expecting a two-year extension in minimum public shareholding for a long time. Now the Government of India has given a 2-year extension. This means that banks and financial institutions have time till August 2026 for minimum public shareholding ( MPS ).
2 years exemption
As per the exemption given by the central government, now banks and financial institutions can maintain MPCS till 1 August 2026. Let us tell you that market regulator SEBI had ordered the public sector banks to maintain 25 percent MPCS. Even now the MPS of 5 banks is more than 25 percent.
Banks whose public shareholding is less than 25 percent should reduce their public shareholding to at least 25 percent within the time limit prescribed in Rule 19A of the Securities Contracts (Regulation) Rules, 1957. Now the banks have an additional two years to do this work. As per the previous order issued by the government, the bank has to maintain MPS by August 1, 2024.
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The government has asked the Securities and Exchange Board of India (SEBI) to take necessary action and bring it to the notice of the concerned stock exchanges.
5 banks do not maintain MPS
Out of the 12 public sector banks, five banks still have MPS more than 25%. The government should have 75% stake in these banks. SEBI has ordered that the MPC of all companies should be 25%.
- The government’s share in Punjab and Sindh Bank is 98.25 percent.
- The government’s stake in Chennai-based Indian Overseas Bank is 96.38 percent.
- The government holds 95.39 percent stake in UCO Bank.
- The government holds 93.08 percent stake in Central Bank of India.
- The government holds 86.46 percent stake in Bank of Maharashtra.
These banks have to increase their MPS to 25 percent in the next two years.
