PSU Bank Stocks in Focus at Budget 2026: Bank of Maharashtra, PNB, Bank of India, SBI and Others

Shares of major PSU banks, including Bank of Maharashtra, Punjab National Bank, Bank of India, and State Bank of India, are expected to remain in focus today. The attention comes as the government may propose the Banking Governance Bill during the Union Budget 2026 presentation, as reported by NDTV Profit.

Reports indicate that the legislation aims to strengthen professionalism, competitiveness, and technology adoption across public sector banks. The update has drawn market interest due to its potential impact on operational norms within the PSU banking system.

Government May Propose Banking Governance Bill in Budget

The government is likely to outline the Banking Governance Bill during today’s Budget proceedings. According to NDTV Profit, the proposed law aims to make PSU banks more professional, competitive, and technology‑driven.

The Bill may address areas such as board composition, accountability standards, and gaps in pay structures between public and private sector banks. Sources noted that it could also include measures enabling PSU banks to finance large projects more efficiently rather than focusing primarily on safeguarding public deposits.

Structural Reforms Aimed at Enhancing PSU Bank Competitiveness

The government’s broader objective is to make PSU banks more competitive by Vision 2047. As part of this effort, discussions may include raising the FDI limit in PSU banks from the current 20%. Reports suggest that the Banking Governance Bill is still being finalised and could take another 3 to 4 months before it is ready for introduction in Parliament. A formal announcement during the Budget would signal intent to push ahead with one of the sector’s most significant structural reforms in recent years.

Budget 2026 To Be Presented Alongside Economic Survey Insights

Finance Minister Nirmala Sitharaman will present the Union Budget 2026–27 today. The Economic Survey was tabled on January 29, 2026, providing an overview of India’s economic landscape heading into FY27.

The Survey stated that India must build “strategic indispensability” at a time when global trade and capital flows are increasingly shaped by tariffs and economic statecraft. It highlighted that India’s macroeconomic position remains strong even as the external environment becomes more complex.

Economic Survey Highlights Growth Outlook and Global Challenges

The Economic Survey projected real GDP growth of 6.8% to 7.2% in FY27. It placed FY26 growth at 7.4% based on the first advance estimates, with domestic demand driving economic activity.

However, it also noted that the global environment has shifted and may not reward macroeconomic stability with traditional benefits such as currency stability or increased capital inflows. Chief Economic Adviser V Anantha Nageswaran observed that India’s economic performance now interacts with a global system influenced by strategic and political considerations.

Read More: RBI Postpones Mandatory Climate Risk Reporting for Banks

Conclusion

PSU bank stocks are likely to see heightened attention as the government considers announcing the Banking Governance Bill in the Union Budget 2026. The proposed reforms could address core governance issues and support long‑term competitiveness in the public banking sector.

Broader structural discussions, including a potential FDI limit increase, underline the government’s intent to modernise PSU banking operations. The Budget and accompanying Economic Survey insights will offer further clarity on how these measures align with India’s economic priorities for FY27 and beyond.

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