Government to consider holding company for public sector banks
By Vaibhav Aggarwal
Jan 17, 2013
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The Cabinet is likely to consider a proposal for setting up a holding company for public sector banks to raise more funds from the market instead of seeking funds from the exchequer.

An official source said, "We are moving to Cabinet for setting up a holding company for public sector banks".

The source further said that it will take around 2-3 weeks for setting up a holding company and there will be one holding company for all the state-run banks.

The Law Ministry's opinion has been sought for making the legislative changes as various Acts will have to be coordinated and amendments will be required in the Banking Companies (Acquisition and Transfer of undertakings) Act, 1970 and 1980.

The State Bank of India Act 1955 and SBI Subsidiaries Act 1959 will have to be synchronized with the holding company structure, sources said.

"The Law Ministry has to vet the proposal first. Then it will go to Cabinet", the source said.

According to the structured proposed, 99 per cent of government holdings in the bank will be shifted to the holding company and the Government will have only 1 per cent with itself so that it remains a state-owned bank.


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