The Indian government is considering proposals to cut its stake in public sector banks to 52% that could enable it to raise nearly $14.39bn.
The government owns stakes ranging from 56% to 84% in 24 public sector banks (PSBs) that account for 70% of total outstanding loans of about $1 trillion in India.
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Minister of State for Finance Jayant Sinha told lawmakers that the stake sale will enable the government to scale back its budgetary support for the banks.
The state-run banks are estimated to need as much as $60bn in capital over the next four years to meet upcoming global regulations and to build a buffer against rising bad loans.
While the government has traditionally funded the PSBs, it is now looking to cut the capital injections to lower its budget deficit.
Local media reports suggest that the federal cabinet is expected to take a final decision on the issue of stake sale soon.
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