Shares of These Two Govt Banks Rally As Centre Proposes Their Privatisation

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Shares of These Two Govt Banks Rally As Centre Proposes Their Privatisation
Credit: © Reuters.

By Malvika Gurung

Investing.com -- In the upcoming Winter session of the Parliament, set to commence on November 29, the Government will be introducing a banking bill, called the ‘Banking Laws (Amendment) Bill 2021’, as it proposes to privatise two public sector banks.

According to a report by CNBC, the Center has proposed privatising two state-owned banks, Indian Overseas Bank (NS: IOBK ) (IOB) and Central Bank of India (NS: CBI ). The aforementioned banking bill will be among the 26 new Bills to be introduced in the Lok Sabha, of a total of 29 Bills.

As a result, shares of the two state-owned banks surged up to 20% on Wednesday, with Indian Overseas Bank trading 14.7% high at Rs 22.7 apiece, and Central Bank of India (NS: BOI ) trading 10.5% high at Rs 22.7 apiece at 3:25 pm.

As per the proposed legislation, certain amendments would be required under the Banking Companies Act, 1970 and 1980, along with incidental amendments to be made in the Banking Regulation Act, 1949.

In her Union Budget speech for FY 2021-22, Finance minister Nirmala Sitharaman announced privatising two public sector banks, in order to meet the government's disinvestment drive for garnering Rs 1.75 lakh crore by FY22.




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