The Central Government has selected Central Bank of India and Indian Overseas Bank for privatization. The central government will disinvest its share in both these public sector banks. The plan is to sell 51 per cent stake in the first selection.
After this news, there is a 20% upper circuit in the stock of Central Bank of India and Indian Overseas Banks in the stock market. The shares of IOB were trading at Rs 19.85 before this news, which suddenly rose 19.80% to Rs 23.60. On the other hand, the shares of Central Bank climbed 19.80% from Rs 20 to Rs 24.20.
For the privatization of these two banks, the central government will change some other laws along with changes in the Banking Regulation Act. Also there will be discussion with RBI. NITI Aayog had recommended the names of these two banks. The commission was entrusted with the responsibility of selecting the names of two public sector banks and one insurance company for privatization.
Let us tell you that Finance Minister Nirmala Sitharaman had announced the privatization of two public sector banks and an insurance company in the budget for the financial year 2021-22. The government has set a target of raising Rs 1.75 lakh crore through disinvestment for FY22.