Capital markets regulator Sebi has suggested that banks and financial institutions from public sector be considered as ‘public shareholders’ in stock exchanges. However, sources say, the view has been rejected by finance ministry. The issue is likely to be discussed on Thursday at a meeting of the Sebi’s board, which would also be apprised of the impact of the finance ministry’s decision for not agreeing to such a proposal, sources said. If the current stalemate continues, three national stock exchanges — MCX-SX, United Stock Exchange and BSE - would have to increase their public shareholding by 25.66 per cent, 1.72 per cent and 0.845 per cent respectively by April 2015. At NSE, the public shareholding is at 57.48 per cent — well above the required level of 51 per cent. Sebi is of the view that any restrictions on shareholding of banks and financial institutions by allowing them to hold shares in bourse only as ‘public shareholders’ would hamper their participation in the development of the market.
