New Delhi: Parliament on Thursday passed a bill allowing the government to reduce its stake in State Bank of India (SBI) to the bare minimum of 51%, reports PTI.
The stipulation so far has been that the government can dilute its stake up to 55%.
If the government chooses to dilute its stake, from 59.41% to 51%, it can raise around Rs15,000 crore, going by the prevailing share price of the state-owned lender.
The Rajya Sabha yesterday passed the State Bank of India (Amendment) Bill, 2010, which was earlier approved by the lower house.
However, finance minister Pranab Mukherjee indicated that dilution of the government's stake would not be rushed, even though both Houses of Parliament have passed the Bill.
"It is just an enabling provision and it does not mean that tomorrow it is going to be implemented," he said in Parliament.
SBI chairman O P Bhatt also said a follow-on public offer (FPO) is not the priority of the bank and it plans to raise Rs 20,000 crore from a rights issue, which does not necessarily dilute government equity, this fiscal.
"It (the new provision) gives us a leeway of 4%," Mr Bhatt told reporters here.
However, he said his option would be to go for a rights issue for mobilising Rs20,000 crore in this financial year.
"We do plan to raise capital by rights issue... We have written to the government," Mr Bhatt said.
"It is up to them (government) to decide to participate (in rights issue) or not," he added.
If a rights issue does not happen, the bank has the option to go for a preferential issue or follow-on offer, he said.
A rights issue will normally not lead to a dilution of government equity in SBI. The government's equity will only be reduced if it decides not to participate in the rights issue or does not fully subscribe to its quota.
The government currently holds a 59.41% stake in SBI, after acquiring the Reserve Bank of India's (RBI) stake in the public sector lender in 2007.
This will enable the government to mop-up around Rs15,000 crore from the markets at the current rate if it decides to dilute its stake in SBI up to the minimum limit.
Seeking to allay members' apprehensions, Mr Mukherjee said in the Rajya Sabha, "There is no intention of having interference in the working of SBI.