Central Bank of India Share Prices Surges due to the Tie-up with Protium Finance, IFSL, for co-lending to MSMEs

 


Original Content- Business Upside 

Central Bank of India (CBI) had been in the news since November 2021, when reports in the media indicated the possibility of its privatisation along with the Indian Overseas Bank (IOB). The government had decided to privatise the two public sector banks after changing the Banking Act in the parliament. As it happens on such occasions, the bourses were quick to react positively, and the shares of the banks surged on hearing the news. At that time, shares of CBI and IOB gained 10.5% and 13%, respectively, on the Bombay Stock Exchange. Finance Minister Nirmala Sitharaman announced the government’s decision to go through the parliamentary process to enable the privatisation of the two public sector banks.

Government’s Stake in the Central Bank of India

The decision to privatise the two public sector banks was in pursuance of the recommendation of the NITI Ayog, the think tank for national developmental projects. The government had made its intent clear about privatising the two public sector banks by including the proposal in the Union Budget 2021-22. The central government owns a 93% stake in CBI, and its stake in Indian Overseas Bank is 96.4%. The privatisation process is lengthy and complex and could take at least 12 months to complete. Hence, the government is keen to set the ball rolling to bring down its shareholding in CBI and IOB below 51%.

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