Five public sector lenders, namely Bank of Maharashtra, IOB, and UCO Bank, are planning to reduce the government's stake in their banks to less than 75% to comply with Sebi's minimum public shareholding (MPS) norms. Financial Services Secretary Vivek Joshi has confirmed this. As of March 31, 2023, only four out of the 12 public sector banks (PSBs) had complied with MPS norms.

The Minimum Public Shareholding (MPS) rule requires all listed companies in India to ensure that at least 25% of their equity shares are held by non-promoters (public). Under this rule promoters with a stranglehold on listed companies were asked to compulsorily sell down their stake by placing shares with institutions or issuing rights or bonus shares.

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According to recent reports, the government has a high percentage of holdings in several banks, including Punjab & Sind Bank in Delhi at 98.25%, Indian Overseas Bank in Chennai at 96.38%, UCO Bank at 95.39%, Central Bank of India at 93.08%, and Bank of Maharashtra at 86.46%. However, state-owned banks have been given special forbearance by regulators and have until August 2024 to meet the requirement of 25% MPS.

 

 

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