Cabinet clears SBI amendment bill

The UPA government today cleared the introduction of State Bank of India (Amendment) Bill in the current session of Parliament. The Bill seeks to bring the government’s holding in the country’s largest public sector bank on a par with other public sector banks at 51 per cent. Currently, the Union government holds 59 per cent stake in the SBI.

At present, the stake of the promoter, that is Government of India, cannot fall below 55 per cent.

Today’s move is expected to pave way for the bank to expand its capital base, either through a follow-on public offer or a rights issue or other financial instrument.

However, the Cabinet today deferred a decision on the controversial Pension Fund Regulatory and Development Authority Bill (PFRDA). Although the Bill was listed in the agenda paper of the meeting, it was not discussed and is likely to be taken up in the next Cabinet meeting.

The Bill was introduced by Finance Minister P Chidambaram in 2005 but fierce opposition from the Left parties did not allow the government to proceed with the Bill.

According to sources, the UPA government is not sure whether it can pass the controversial Bill in both Houses of Parliament if it is brought now. In the next few days, the support for the UPA is expected to increase in the Upper House as it plans to bring a few more MPs under the nominated members category.

The winter session of Parliament is scheduled to continue till December 21. But the government may wrap up the session on December 18.