The names of Indian Overseas Bank (IOB) and Central Bank of India have cropped up again as targets for privatisation as the government plans to introduce the Banking Laws (Amendment) Bill 2021 in the winter session of Parliament. 

The shares of these two banks shot up amid speculations that the government would announce them for privatisation. IOB closed up 13.1% to Rs 22.45 on the BSE while Central Bank of India shares rose 10.5% to Rs 22.70. In intra-day trade, the shares surged by over 20% before shedding some gains.

Even if earmarked for privatisation, it is highly unlikely to happen in the current financial year. IDBI Bank, earlier announced for sale, is also unlikely to complete the process this fiscal.

What is more certain is that the Bill will be taken up by Parliament in the winter session seeking to “effect amendments to Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980 and incidental amendments to Banking Regulation Act, 1949 in the context of Union Budget announcement 2021 regarding privatisation of two public sector banks”.

There are 26 bills, including the Banking Laws (Amendment) Bill 2021, that are to be introduced in the session.

Whether the bill proposal will be referred to a Standing Committee or it will sail through remains to be seen. 

Meanwhile, IOB and Central Bank of India on Wednesday clarified to the stock exchanges that they hadn’t received any information from the government regarding their privatisation.

In a regulatory filing, IOB said: “…we do not have any information on privatisation of the bank as on date. There is no such negotiation/event taking place at the bank.” 

Central Bank of India said, "We inform that we have not received any communication regarding privatisation of bank from DFS/ Government of India and we are unaware of the reasons for the sudden movement in stock price. It may be due to speculation."