The Indian government is planning to reduce its stake in five state-run banks to comply with the minimum public holding requirements set by the Securities and Exchange Board of India (SEBI). This move is intended to decrease the government’s ownership in these banks to below 75%. The said banks are UCO Bank, Central Bank of India, Indian Overseas Bank, Bank of Maharashtra, and Punjab and Sind Bank.
According to the plan, the Department of Investment and Public Asset Management could sell the government’s stake in these banks, or the banks themselves could do so directly to major investors. This decision is expected to enhance the liquidity of these banks, allowing them to provide greater capacity for lending.
As of September, the government was reported to own over 93% in Central Bank of India, 96.4% in Indian Overseas Bank, 95.4% in UCO Bank, 86.46% of the Bank of Maharashtra, and 98.3% in Punjab and Sind Bank. The sale of minority stakes in these banks is expected to take place before the deadline of August 2026, when government-owned firms need to comply with the 25% public shareholding requirement.