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Public sector banks and financial institutions were expecting a two-year extension in minimum public shareholding for a long time. Now, the Government of India has given a 2-year extension. Banks and financial institutions have time till August 2026 for minimum public shareholding. Public sector banks and financial institutions were expecting a two-year extension in minimum public shareholding for a long time. Now, the Government of India has given a 2-year extension. This means that banks and financial institutions have time till August 2026 for minimum public shareholding (MPS)
2 years exemption
As per the exemption given by the central government, banks and financial institutions can now maintain MPCS till 1 August 2026. Let us tell you that market regulator SEBI ordered the public sector banks to maintain 25 per cent MPCS. Even now, the MPS of 5 banks is more than 25 per cent.
Banks whose public shareholding is less than 25 per cent should reduce their public shareholding to at least 25 per cent within the time limit prescribed in Rule 19A of the Securities Contracts (Regulation) Rules, 1957. Now, the banks have an additional two years to do this work. As per the previous order issued by the government, the bank has to maintain MPS by 1 August 2024.
The government has asked the Securities and Exchange Board of India (SEBI) to take necessary action and bring it to the notice of the concerned stock exchanges.
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