Due to the recent fluctuations in the stock market, the Indian government has come up with a strategy of reduction of about Rs 3000 crore on the public sector bank. The recapitalisation is required to recover the loss resulted by the current share prices and hence, the profits will be on hold till the shares get sold. Though, the government is not going to take interest in this matter. But, the investment price in the case of State Bank of India (BSE 1.06 %) has been determined at Rs 274.37 a share.
According to the norms of stock market regulator Securities and Exchange Board of India, interest benefit on such finance must be attained at higher price that should not be less than the average of weekly closing either higher or lower in the last six months or two weeks. With such rules, the finance at which the shares are assigned to the government will be higher than the present market rate. The profit is set up to 17 percent since March of this year.
Source: The Economic Times