Finance Minister Arun Jaitely has reiterated the government’s plan to cut its stake in public sector banks that will help raise resources to recapitalise them over a period of time. The finance ministry is still preparing the roadmap on this front and plans to seek Cabinet nod on the same, after August 14.
“It’s not merely inclusion. All this would further bring in the unbanked money into the banking system,” said Jaitely adding that if the unbanked money, which is fairly large in amount, gets into the system, would be very useful for the economy.
He said the government is also coming up with the proposal of recapitalization of public sector banks over the next 4 years. While government equity will remain a majority, a lot of PSB equity can be off loaded in the open market for retail investors. This in turn through the government will go back to the banking system to enable banks to expand and thereby increase the whole process of financial inclusion.
Moreover, Banking Secretary GS Sandhu has denied cutting government stake in State Bank of India (SBI) immediately, from 58 percent to a 52-53 percent level, saying the ministry is yet to take a call on how much equity should be offloaded this fiscal.
