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Updated: July 10, 2025 07:03
India's public sector banks will raise Rs 45,000 crore of new capital in FY26 using Qualified Institutional Placements (QIPs), a strategic initiative to improve balance sheets and address regulatory requirements. The proposal was cleared by government sources as part of a larger divestment and compliance program.
SBI Leads the Way
State Bank of India got the Finance Ministry's nod to raise Rs 20,000 crore through QIPs
The window of fund-raising would soon open, thus positioning SBI as the anchor of this capital mobilization wave
Disinvestment Strategy in Practice
Government will divest its holding in five PSU banks in Offer for Sale (OFS):
• Bank of Maharashtra
• Indian Overseas Bank
• UCO Bank
• Central Bank of India
• Punjab and Sind Bank
They are designed to satisfy SEBI's minimum public shareholding of 25%.
LIC Stake Sale Also in the Offing
Department of Financial Services has sanctioned a sale of Life Insurance Corporation holding through OFS
Timing will be investor and market sentiment driven
Compliance Deadlines and Extensions
Bank of Maharashtra will be meeting the 25% public shareholding requirement this year
For the remaining four banks, the timeline can be advanced to FY27
This new capital will go towards augmenting provisioning, enabling lending expansion, and bringing financial solidity to the overall public banking system.
Sources: Moneycontrol, Business Standard, Financial Express, MarketScreener, Economic Times