IOB, Central Bank issue clarification to exchanges on privatisation as shares jump up to 20%, intraday

Indian Overseas Bank (IOB) and Central Bank of India today issued clarifications over news reports suggesting that government may bring a privatisation bill for these two banks during the winter session of Parliament. The news led to a surge in the share price of these banks.

“We have not received any communication regarding privatization 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,” IOB said in a post-market filing.

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Similarly, Central Bank in its exchanges filing said, “We do not have any information on privatization of the bank as on date. There is no such negotiation/event taking place at the level of Central Bank of India.”

The public sector back added, “We do not have any information/announcement which in our opinion may have bearing on the price/volume behaviour in the scrip of the Bank.”

The stock price of both the banks surged up to 20 per cent intraday today on the BSE. However, IOB shares closed on Thursday by over 13 per cent to 22.45 per share and Central Bank gained around 10.5 per cent to Rs 22.7 per share on the BSE, as against a 0.55 per cent fall in the S&P BSE Sensex.

Earlier this morning, the exchanges had sought clarification from Indian Overseas Bank on November 24, 2021, with reference to news that appeared in https://www.business-standard.com/ dated November 24, 2021 quoting "IOB, Central Bank of India surge up to 20% on privatisation buzz"

The development finds root in 26 Bills to be introduced in the winter session of the Parliament. Without taking the name, the agenda of the Parliament reads, “the bill intends 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 the Union Budget announcement 2021 regarding privatisation of two Public Sector Banks.”