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The Government of India has appointed global investment banking firm Goldman Sachs as the sole transaction advisor for the stake sale in four public sector banks (PSBs)—UCO Bank, Central Bank of India, Punjab & Sind Bank, and Indian Overseas Bank (IOB).
Goldman Sachs will be responsible for structuring the deal, identifying potential investors, and ensuring smooth execution of the stake sale. The move is part of the Centre’s broader banking sector reform strategy aimed at improving the operational efficiency and market competitiveness of public sector banks.
The government is likely to dilute its equity stake in each of the four banks by up to 5%. The disinvestment will be executed in tranches, starting in the current fiscal year (FY26) and spread over the next two to three years.
Goldman Sachs will be responsible for structuring the deal, identifying potential investors, and ensuring smooth execution of the stake sale. The move is part of the Centre’s broader banking sector reform strategy aimed at improving the operational efficiency and market competitiveness of public sector banks.
The government is likely to dilute its equity stake in each of the four banks by up to 5%. The disinvestment will be executed in tranches, starting in the current fiscal year (FY26) and spread over the next two to three years.
Despite initiating the OFS process, the government is also expected to request an extension of the August 2026 deadline for achieving MPS compliance, likely pushing it to 2027, as equity dilution will occur gradually. Currently, government holdings in all four PSBs stand at 89% or higher.
In parallel, the government is preparing to invite financial bids for the strategic sale of IDBI Bank between October and December 2025, to select a successful bidder by the end of FY26, according to another CNBC-TV18 report quoting DIPAM Secretary Arunish Chawla.
The government’s move to bring down its stake in public sector banks aligns with broader efforts to enhance governance standards, deepen capital markets, and comply with SEBI’s MPS norms.
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