Indian Overseas Bank shares rallied as much as 50 per cent in the past three trading sessions on reports that the government has shortlisted it, along with three other mid-sized state-run banks, viz. Bank of India, Central Bank of India and Bank of Maharashtra for privatisation. Indian Overseas Bank has hit the 20 per cent upper limit at Rs 18.80 on the NSE. The Nifty PSU Bank index gained around 32.77 per cent in the last one month and is quoting at 2,450.9, up 5.13 per cent on the day. On the BSE, shares of Indian Overseas Bank were locked at the upper circuit of 20 per cent, at Rs 19.00. (Also Read: Select State-Run Banks Soar For Second Straight Day On Privatisation Buzz )
In a report on Tuesday, February 16, news agency Reuters, citing sources, had referred to the four banks as potential privatisation candidates. Earlier, while presenting Budget 2021, Finance Minister Nirmala Sitharman had also announced that the government will privatise four banks and an insurance company.
For its first round of privatisation, the government is considering mid-sized to small banks. The government can also look at some of the country's bigger banks in the coming years. According to officials, two of the banks will be selected for sale or for the privatisation drive in the next fiscal year
However, the government will continue to hold a majority stake in the country's largest lender - the State Bank of India, which is seen as a 'strategic bank' for implementing initiatives such as expanding rural credit.