Indian Overseas Bank, Bank of India, Central Bank of India and Bank of Maharashtra shares rallied as much as 20 per cent for the second consecutive day on reports that the government has shortlisted the four mid-sized state-run banks for privatisation. News agency Reuters, in a report on Tuesday citing sources, had referred to the four banks as potential privatisation candidates. Bank Of India, Bank of Maharashtra and Indian Overseas Bank touched a 52-week high of Rs 83.90, Rs 22.85 and Rs 15.70 respectively on the BSE, while Central Bank is heading towards its yearly high.
The government is considering mid-sized to small banks for its first round of privatisation to test the waters. It could also look at some of the country's bigger banks In coming years, officials told Reuters. Two of the banks will be selected for sale in the 2021/2022 financial year beginning in April, the officials added.
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.
The Nifty PSU Bank Index gained more than 2 per cent to fresh high of 2,397.80, led by gains in the four mid-sized banks. The BSE Sensex were trading lower by 0.6 per cent at the time.