Indian Overseas Bank, Central Bank of India Clarify On Privatisation Buzz

The state-owned Indian Overseas Bank (IOB) and the Central Bank of India (CBI) have explained the privatization craze that has been circulating around stock exchanges. Both of the bank's stocks had a lackluster demand on Thursday.

Yesterday, news that the government has nominated IOB and CBI for privatization boosted their stock by 20%. IOB was trading at Rs22.10 per piece at 12:54 p.m., down 1.6 percent on the Sensex. CBI was trading at Rs22.80 per piece, marginally up from its previous close.

The bill seeks to "effect amendments in 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 privatization of two Public Sector Banks".

However, despite their clarification, both stocks retreated from their spectacular rise on Thursday.

According to IOB, "In this regard, we would like to state that we have not received any information from DFS/Government of India regarding the bank's privatisation, and we are ignorant of the causes for the stock price's abrupt fluctuation. It's possible that it's due to supposition."

According to CBI, "We would like to notify you that the Central Bank of India is a government-owned public sector bank. In terms of the related media reports, we do not have any current information on the Bank's privatisation. At the level of the Central Bank of India, no such dialogue or event is going place. It is also stated that as of today, we do not have any information/announcement that may have an impact on the price/volume behaviour of the Bank's scrip."