During the fiscal year 2025–2026, Indian government-owned banks want to sell shares to major investors in order to raise around ₹45,000 crore, or $5.25 billion. According to a senior government source, this would be accomplished through a procedure known as Qualified Institutional Placement (QIP).
In the near future, the State Bank of India (SBI), the nation's biggest bank in terms of total assets, will also introduce its QIP. SBI has already authorized plans to raise ₹25,000 crore in equity capital this year earlier in May. By October 2025, the government also intends to finish selling its ownership of IDBI Bank. This is a component of its broader strategy to create money and decrease its holdings in specific public sector banks.
In addition to IDBI Bank and SBI, the government is also preparing to sell shares in the following banks during this financial year: UCO Bank, Bank of Maharashtra, Central Bank of India, Punjab & Sind Bank, Indian Overseas Bank
These stake sales are expected to help the government raise additional funds and increase private participation in public sector banks.
While the actual stake sales are anticipated to start in FY 2026-27, the planning and foundational work will take conducted in FY 2025-26. The government of Prime Minister Narendra Modi stated in this year's Union Budget that it plans to raise ₹47,000 crore by selling its shares in public sector businesses and by selling off government assets.
The Inter-Ministerial Group (IMG), a group of ministers and senior officials, reportedly convened on July 8th to choose legal and technical advisors for the stake sale. The Department of Investment and Public Asset Management (DIPAM) and the Department of Financial Services (DFS) served as co-chairs of this group.
Although selling off a stake does not directly constitute privatization, it does eventually result in it. It gradually results in privatization. The government will become less owned as a result of private persons and organizations purchasing its interest. Government ownership will continue to decline with more divestiture, and the bank will be privatized if it drops below 51%.
Furthermore, even if the government retains 51% of the business, the remaining 49% is owned by private companies, who attempt to impose their own rules and regulations on government organizations, ultimately introducing a corporate culture.
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