The government plans off-load its stakes in the state-run banks to raise Rs 89,120 crore.Minister of state for finance Jayant Sinha informed the Lok Sabha that the government was "considering" bringing down its equity in state-owned banks to 52 per cent to "substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks".Finance minister Arun Jaitley had earlier said PSU banks would require recapitalisation to the extent of Rs 2.4 lakh crore and this would be one of his top priorities.
Under the Basel III norms, banks will have to maintain a minimum 9 per cent capital to risk-weighted assets. They will also have to maintain a capital conservation buffer of their risk-weighted assets to absorb shocks from financial and economic stress.There are about 24 state-run banks and the government holding in them varies between 56.26 per cent and 88.63 per cent.According to the existing law, the government's stake in public banks cannot fall below 51 per cent.
