Lok Sabha Question No. 2 (STARRED), answered on 2018-02-02
Subject: Banks’ Stake Sales to Raise Capital
Ministry: FINANCE
Asked by: ELUMALAI VELLAIGOUNDER

## GOVERNMENT  OF INDIA

## LOK SABHA

## MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL  SERVICES

## STARRED QUESTION NO. *2

TO BE ANSWERED  ON THE 2 ND  February  2018/ Magha  13, 1939 (SAKA)

## Banks' Stake Sales to Raise Capital

## *2. SHRI V. ELUMALAI:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether  the Banks are planning  to go for stake  sales to raise capital  in 2018 and if so, the details  thereof;
- (b) whether  the Public  Sector  Banks are also planning  for strategic  sales and if so, the details  thereof;
- (c) whether  the private  lenders  have made a move to extract  value  through  listing  of their  subsidiaries;  and
- (d) if so, the details  thereof?

THE FINANCE  MINISTER (SHRI ARUN  JAITLEY)

## ANSWER

- (a) to (d):  A Statement  is laid  on the Table  of the House.

***

## STATEMENT  FOR  LOK  SABHA   STARRED  QUESTION  NO.*2  FOR  2 ND FEBRUARY  2018 REGARDING 'BANKS' STAKE SALES TO RAISE CAPITAL' BY SHRI V. ELUMALAI, MEMBER OF PARLIAMENT.

(a) to (d):   Banks,  from  time  to time,  review  investments  made by  them  to unlock  value by  way   of  capital   receipts.   As  per  regulations   of  Securities   Exchange   Board  of  India (SEBI),a listed  entity  is required  to make  disclosure  to stock  exchange  regarding  sale of investments   which   are  material   in  nature   and  not  in  normal   course   of  business.   SEBI regulations  do not distinguish  sale of investments  in terms  of strategic  or other  sales.

The  choice  of  the  mode  of  stake   sale  to  optimise   value   is  dependent   on  market conditions.   Private   placement   and  Initial   Public   Offer  provide   different   advantages, depending  on nature/quantum of investment,  timing,  investor  attractiveness  thereof,  and the cost and time  involved  in the process. Sellers,  including  private  lenders,  choose the mode of sale based on their  assessment of market  conditions  and associated  advantages.

As  regards   investments   of  Public   Sector   Banks,   details   of  proposed   sale  of  shares  / strategic   sale  of  their   subsidiaries,   as  disclosed   by   the  banks   to  stock   exchanges,   are  at Annex.

## Lok Sabha Starred  Question  No. *2 for  2.2.2018,  regarding  'Banks' Stake Sales to Raise Capital'

## Proposed stake sales disclosed to stock exchanges since 1.10.2017

|   S.N. | Bank               | Name of company                      | Date of Board approval   |
|--------|--------------------|--------------------------------------|--------------------------|
|      1 | CanaraBank         | CanbankFactorsLtd.                   | 23.10.2017               |
|      2 | CanaraBank         | CanFinHomesLtd.                      | 21.11.2017               |
|      3 | CanaraBank         | CanbankComputerServicesLtd.          | 21.11.2017               |
|      4 | CanaraBank         | NationalStockDepositoryLimited       | 20.12.2017               |
|      5 | IDBI Bank          | NationalStockExchangeIndiaLimited    | 27.11.2017               |
|      6 | IDBI Bank          | NationalStockDepositoryLimited       | 5.12.2017                |
|      7 | IDBI Bank          | NSDLeGovernanceInfrastructureLimited | 11.12.2017               |
|      8 | PunjabNationalBank | PrincipalPNBAssetManagementCompany   | 2.11.2017                |
|      9 | PunjabNationalBank | PrincipalTrusteeCompanyPvt.Ltd.      | 2.11.2017                |