Centre may continue to hold at least 26% stake in public sector banks

To protect decision making of bank executives, a new provision will also be included in the law to protect them for action taken in good faith

The Centre may continue to hold at least 26 per cent stake in public sector banks (PSBs) that are being considered for privatisation, sources aware of the development said. Currently, the government is looking at privatising two banks.

At present, the government has to hold 51 per cent in PSBs at all times, according to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. Now, the Banking Laws (Amendment) Bill 2021, which will provide for reducing the government's minimum shareholding in PSBs to 26 per cent, is set to be introduced in the upcoming session of Parliament.

The reduction of the