Bank of Maharashtra hit the 20 per cent upper circuit limit at Rs 22.92 in morning deals, after having rallied by a similar measure in the previous session.
Indian Overseas Bank soared 17.42 per cent to Rs 15.50. This stock had risen 20 per cent on Tuesday. Central Bank advanced 16.05 per cent to Rs 19.38 in addition to a 20 per cent rally on Tuesday. Bank of India climbed 14.60 per cent to Rs 80.85 to add to Tuesday’s 20 per cent rise.
“The time to privatise the PSU banks was probably two years back. Today, if you are going to privatise the four PSUs, when they are already at price points at which the government is not going to make anything. You may call me cynical, but I do think it could take a long time before these banks could become healthy again,” said Rajat Sharma, Founder and CEO, Sana Securities.
A Reuters report suggested that the government has shortlisted these banks for privatisation, under a new push to sell state assets and shore up government revenues.
Privatisation of the banking sector, which is dominated by state-run behemoths with hundreds of thousands of employees, is politically risky because it could put jobs at risk but Prime Minister Narendra Modi’s administration aims to make a start with second-tier banks, Reuters reported.
Two of those banks will be selected for sale in the FY22 which begins in April, the officials told Reuters. The shortlist has not previously been reported.
The government is considering mid- to small-sized banks for its first round of privatisation to test the waters. In the coming years it could also look at some of the country’s bigger banks, the officials said.
The government, however, will continue to hold a majority stake in India’s largest lender State Bank of India, which is seen as a ‘strategic bank’ for implementing initiatives such as expanding rural credit.
A finance ministry spokesman declined to comment on the matter, Reuters said.
