The Indian government Monday moved a bill in Parliament to cut its minimum holding in the State Bank of India to 51% to allow the state-run lender to raise more capital from the market.
Under existing law, government holding in the bank can't fall below 55%. As of December last year, the government's holding stood at 59.41%.
The proposed changes in the State Bank of India Act will allow the country's largest lender by assets to issue preference shares. It will also enable the bank to issue bonus shares or privately place shares.
The government has also proposed increasing the authorized capital of the bank to 50 billion rupees ($1 billion).
Source: WSJ