PSBs may get the golden option to raise money

The government may have to consider the golden share option for public sector banks to help them raise extra capital from the markets. This is among several proposals being debated by advisers to the government as part of a strategy to strengthen the capital structure of these banks. Golden share means vesting a share or a set of shares with extraordinary rights to block any move made by a board of directors to alter a bank’s structure, like transforming a public sector bank into a private sector one, even if the government holds minority stake in it. The proposal is a re-run of a plan mooted by the previous NDA government to dilute government equity in banks from 51% to 33%.