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Question

Warehousing method of disinvestment refers to __________.

A
government selling part of its shares in one PSU to other PSUs.
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B
government selling shares of PSUs to public sector financial institutions and banks.
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C
government's own financial institutions buying government's stake in select PSU's and holding them until any third buyer emerges.
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D
none of the above.
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Solution

The correct option is B government's own financial institutions buying government's stake in select PSU's and holding them until any third buyer emerges.
Warehousing method or Cross holding method of Disinvestment refers to Government selling part of its Shares in one PSU to other PSUs. The term disinvestment is more popularly used where central/ state government sells its holdings of public sector companies. Disinvestment means selling of Public investment to a Private entrepreneur.

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