PSBs likely to go on a fundraising spree to reduce govt shareholding

However, with market sentiments remaining muted, the fundraising might not be an easy task, especially for banks which are still under PCA.

Public sector banks (PSBs), especially the ones that have come out of prompt corrective action (PCA) framework, are likely to go on a fundraising spree, with the twin purpose of raising growth capital and bringing down government shareholding in the banks to 75 per cent. 

The dilution of government stake is essential to meet the 25 per cent public float norms mandated by Securities and Exchange Board of India (Sebi).

According to a senior official in a PSB, the Sebi had been giving dispensation to banks to extend the timeline to meet the free float norm on a case by