The Central Government is working on a plan to sell its minority stake in select public sector banks (PSU Banks) in the 2025–26 fiscal year. This sale will be done through an offer-for-sale (OFS), starting with two banks in the first phase.
According to a report by NDTV Profit, the banks in which the government plans to reduce its stake include Bank of Maharashtra, Indian Overseas Bank, UCO Bank, Central Bank of India, and Punjab & Sind Bank. The government plans to sell approximately 20% of its equity in a phased manner, reducing its stake below 75% and ensuring compliance with SEBI’s 25% minimum public float requirement.
Merchant bankers and advisors have been assigned responsibility for this process since August 2025. The government expects to see significant progress in this direction in the current fiscal year. This move will not only boost the market value and liquidity of these banks, but also help the government meet its divestment target. However, the decision on which two banks will be divested in the first phase has not yet been finalized.