Indian Overseas Bank, Central Bank shares hit record high

Indian Overseas Bank and Central Bank of India shares jumped 18 percent and 16 percent, respectively, in early trade on Tuesday amid reports that the government has shortlisted these banks for privatisation. Indian Overseas Bank touched a 52-week high of ₹27.95 and Central Bank of India touched a 52-week high of ₹28.30. At 10:54am, Indian Overseas Bank was quoting at ₹25.80, up ₹1.50 or 6.17 per cent and Central Bank of India was quoting at ₹25.65, up ₹2.05 or 8.69 per cent on the BSE.

On Monday, shares of Central Bank were locked in the upper circuit at ₹24.30 on the back of over two-fold jump in trading volumes and those of Indian Overseas Bank hit a 52-week high of ₹23.60 on NSE.

Television channel CNBC Awaaz reported that Central Bank of India and Indian Overseas Bank might see 51 per cent sale in the first phase of disinvestment. The government may amend the Banking Regulations Act and Banking Law Act during Parliament's Monsoon session to privatise the two state-run banks, the report suggested. The move comes after Union finance minister Nirmala Sitharaman announced during her Budget 2021 speech in February that two public sector banks (PSBs) would be privatised in 2021-22.

The NITI Aayog has been entrusted with the job of identifying suitable candidates for the privatisation and has recommended names to a high-level panel headed by cabinet secretary Rajiv Gauba. Central Bank of India, Indian Overseas Bank, Bank of Maharashtra and Bank of India are some of the names that may be considered for privatisation by the Core Group of Secretaries on Disinvestment.

Once the names are finalised by the Core Group of Secretaries, they will go to the Alternative Mechanism (AM) for its approval and eventually to the cabinet headed by Prime Minister Narendra Modi for the final nod. A process on the changes on the regulatory side to facilitate privatisation would start the cabinet nod.