State Bank of India will dilute its holding in the seven associate banks to 51 per cent once the Parliament enacts a law in this regard paving way for them to enter the capital market.
"SBI would dilute its holdings in the associate banks to 51 per cent from the present 98 per cent once the Parliament frames a law in this regard," SBI group chairman A K Purwar said at the 45th Annual General Meeting (AGM) of State Bank of Indore in Indore.
"This would bring the price of the associates shares to Rs 10 from Rs 100 and enable the domestic and foreign institutional investors (FII) to invest in these banks," he said.
When asked about bringing an IPO to further consolidate its financial position, Purwar said that once the law is passed by the Parliament, which is expected in the next five-six months, all the associate banks would enter into the capital market one after another.
On the demand of share holders and also the bank staff that SBI should liberate State Bank of Indore from its control, Purwar said the management of the Indore Bank is fully autonomous and are acting on its own and therefore no question arises of liberating the bank from SBI.
Referring to the issue of merger of various PSU banks, Purwar said that virtual merger of various banks (core banking) is already complete.
"As far as the legal merger is concerned, there is no intention of it as of today," he said adding if the value of share holders share increases by merger then they should not oppose it.
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