IOB, Central Bank of India surge up to 20% on privatisation buzz

Shares of two state-owned banks, Indian Overseas Bank (IOB) and Central Bank of India (CBI) rallied up to 20 per cent on the BSE in Wednesday’s intra-day trade on back of heavy volumes amid reports that the two financial institutions might be privatised. The Centre has shortlisted CBI and IOB for divestment, according to a report by TV channel CNBC TV18.

IOB has surged 20 per cent to Rs 23.80, while CBI gained 15 per cent on the BSE in intra-day trade today. In comparison, the S&P BSE Sensex was up 0.2 per cent at 58,810 at 09:19 am.

Shares of IOB and CBI had hit a 52-week high of Rs 29 and Rs 29.65, respectively, on June 30, 2021 on the BSE. Meanwhile, Bank of Maharashtra was up 9 per cent to Rs 21.35 and Bank of India gained 3 per cent to Rs 60.35 in intra-day trade today.

The privatisation plan was announced in the Union budget for 2021-22 as a part of the government’s broader divestment goals for FY22. It includes privatisation of several other non-financial state-owned entities and listing of the wholly owned Life Insurance Corporation of India.

In September, Reserve Bank of India (RBI) had removed Prompt Corrective Action (PCA) restrictions on the bank.