The central government has extended the deadline for central public sector enterprises (CPSEs) and public sector financial institutions to meet the minimum public shareholding (MPS) requirement till August 2026. This extension, announced on Thursday, August 1, aims to provide more time for these entities to comply with the MPS norm. The Finance Ministry issued a memorandum stating that CPSEs, public sector banks, and financial institutions now have until August 1, 2026, to increase their public shareholding to at least 25 percent. This decision was made in the public interest, under the provisions of sub-rule (6) of Rule 19A of the Securities Contract (Regulation) Rules, 1957. The notification from the Ministry’s Department of Economic Affairs reads: "In the public interest, every listed public sector company, as defined in the SCRR, 1957, which has public shareholding below 25 percent within the timeline stipulated in Rule 19A of SCRR, 1957, shall be exempted until August 1, 2026, to raise its public shareholding to at least 25 percent." The Securities and Exchange Board of India (SEBI) has been instructed to take the necessary actions and inform the relevant stock exchanges about this extension. Several public sector banks, including Bank of Maharashtra, Indian Overseas Bank, UCO Bank, Central Bank of India, and Punjab and Sind Bank, are working to reduce government stakes to below 75 percent to comply with SEBI’s MPS requirement. As of March 31, 2024, seven out of twelve public sector banks have already met the MPS norm. These compliant banks include State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Indian Bank, Union Bank of India, and Bank of India. Currently, the government holds substantial stakes in several banks: 98.25 percent in Punjab & Sind Bank, 96.38 percent in Indian Overseas Bank, 95.39 percent in UCO Bank, 93.08 percent in Central Bank of India, and 86.46 percent in Bank of Maharashtra. SEBI mandates that all listed companies maintain an MPS of 25 percent. Initially, a special extension was granted to state-owned banks until August 2024 to meet this requirement. Additionally, the Life Insurance Corporation of India (LIC) has been given an extended deadline until May 16, 2027, to achieve a 10 percent public shareholding. Latest Updates: Features of AU Small Finance Bank's Savings Account for Women Japan's Central Bank Hikes Interest Rates, Plans to Reduce Bond Purchases The Shift in Banking Jobs: How Digitalization is Changing the Financial Sector