Govt Selects Goldman Sachs as Sole Banker for 4 PSBs Stake Sale

In a significant step towards banking sector reforms, the Government of India has appointed Goldman Sachs as the exclusive transaction advisor for equity stake sales in 4 public sector banks. The move is designed to enhance governance standards, broaden market participation, and improve operational competitiveness within the state-owned banking space.

Goldman Sachs to Lead Stake Sale Strategy

Goldman Sachs will oversee the process for UCO Bank, Central Bank of India, Punjab & Sind Bank, and Indian Overseas Bank. Its responsibilities include structuring the deals, identifying potential investors, and ensuring seamless execution of the transactions. 

As per news reports, the Centre intends to dilute up to 5% equity in each of these banks, with the disinvestment carried out in tranches beginning in FY26 and spread across the following 2 to 3 years.

Disinvestment and Regulatory Compliance

As per a CNBC-TV18 report, the Department of Investment and Public Asset Management (DIPAM) has already cleared Offer for Sale transactions for 5 public sector banks, including the 4 now in focus.

Bank of Maharashtra, meanwhile, is expected to achieve the minimum 25% public shareholding requirement through a Qualified Institutional Placement route. 

While the equity dilution process is underway, the government is likely to seek an extension of the August 2026 deadline for meeting SEBI’s MPS norms, potentially shifting compliance to 2027, as current government holdings in the four banks stand at 89% or above.

Broader Reform Agenda and IDBI Bank Plans

The appointment of Goldman Sachs and the phased stake dilution form part of a larger strategy to deepen India’s capital markets and strengthen governance within state-owned lenders. In parallel, the government is preparing to invite financial bids for the strategic sale of IDBI Bank between October and December 2025, to finalise a successful bidder by the end of FY26, according to another CNBC-TV18 report quoting DIPAM Secretary Arunish Chawla.

Read More: Goldman Sachs Expands Footprint in India with New Mumbai Office!

Conclusion

The government’s latest move underlines its commitment to making public sector banks more efficient and market-oriented. By bringing in Goldman Sachs and rolling out phased disinvestment, alongside preparations for the strategic sale of IDBI Bank, the Centre is signalling a steady shift towards stronger governance, wider investor participation, and compliance with regulatory norms.

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