"The step would substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks," Sinha said in a written reply.

Sinha further said, "the reduction of government share in equity capital of PSBs to 52 percent will enable mobilisation of Rs 89,120 crore approx on the basis of current market price on November 21".

There are about two dozen PSBs and government holding in them is between 56.26 percent to 88.63 percent.

The government has infused an amount of Rs 58,600 crore since 2011 in these PSBs.



Public sector banks require equity capital of Rs 2.4 lakh crore by 2018 to meet Basel III norms. For the current fiscal, the government has allocated Rs 11,200 crore for bank capitalisation.

As per existing law, government holding in PSBs cannot fall below 51 percent.

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