Mid-sized public sector bank Central Bank of India has sought bids for a 3.11% stake in JM Financial Asset Reconstruction Company (ARC), according to a public notice.
“The bank is proposing to sell 75,00,000 equity shares of face value of Rs 10 each of JM Financial Asset Reconstruction Company Limited, which is 3.11% of paid up equity share capital of JM Financial ARC with a floor price of Rs 27 per share,” Central Bank said in the notice on Tuesday.
The last date for the submission of bids is March 14.
Central Bank’s move to offload its stake in JM Financial ARC is the latest in a series of sales of non-core assets by PSBs to beef up their cash reserves.
Over the past few months, IDBI Bank has moved to sell its entire 30% stake in NSDL E-governance Infrastructure and a 7% stake in National Securities Depository. It is also known to be in talks to exit IDBI Federal Life Insurance.
Union Bank of India has sold a 40% stake in its mutual fund business to Japan’s Dai-ichi Life Insurance Company. Similarly, Bank of India offloaded its entire 5% stake in credit bureau TransUnion Cibil through a sale of shares to US-based TransUnion International.
The government has also instructed PSBs to “consolidate” 35 overseas operations and explore the possibility of undertaking such an exercise in another 69 operations. Earlier this month, financial services secretary Rajeev Kumar had said, “Non-viable operations in overseas market to be closed for cost efficiency and synergy.” He had added that equity stakes in joint ventures having multiple PSB partners will also be consolidated.
The other PSB shareholders in JM Financial ARC are Indian Overseas Bank, UCO Bank and Union Bank of India.
The government’s Rs 2.11-lakh crore recapitalisation plan has also been made contingent on reforms across six themes. Banks have been told to adopt differentiated business strategy and exit from non-core businesses so that they can focus more on core competencies. As a result, more PSBs may be selling off their holdings in non-core assets.