The government is considering changes that would make it easier to lower its stake in state-run banks. This is a key step in PM Narendra Modi’s plan to unclog credit flow to the economy.
Bank privatisation?
If approved, it would allow the government to lower its holding in state-run lenders to 26% from 51%. This won’t dilute its grip on management appointments, a media report said. They would also simplify the privatization of certain identified lenders and permit foreign investors.
It proposes government stake be reduced to a minimum of 26% from 51%. Foreign stakeholders can be allowed to breach the 20% cap.
