Govt appoints Goldman Sachs to help in stake sale in public sector banks

There is a big news related to privatisation of Public Sector Banks in India. The Government of India has appointed the global investment banking firm Goldman Sachs as the sole transaction advisor for selling part of its stake in four public sector banks (PSBs) — UCO Bank, Central Bank of India, Punjab & Sind Bank, and Indian Overseas Bank (IOB).

This shows that the government is interested in selling its stake in PSU banks. With the appointment of Goldman Sachs, the process of privatization has begun. At first, this may appear to be divestment rather than outright privatization, but it is important to note that divestment ultimately leads to privatization, as the government’s stake will be sold to private entities.

The Goldman Sachs Group, Inc. is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City. Goldman Sachs is the largest investment bank in the world by revenue. Goldman Sachs offers services in investment banking (advisory for mergers and acquisitions and restructuring), securities underwriting, prime brokerage, asset management, and wealth management.

How will Goldman Sachs help in stake sale?

Goldman Sachs will help the government in planning the deal, find suitable investors, and ensure that the entire stake sale process runs smoothly. This decision is part of the government’s larger banking sector reform plan, which aims to make public sector banks more efficient and competitive in the market.

Under this plan, the government may reduce its shareholding in each of these four banks by up to 5%. The disinvestment will not happen all at once but in phases (tranches), starting in the current financial year (FY26) and continuing over the next two to three years.

he Department of Investment and Public Asset Management (DIPAM) has already approved Offer for Sale (OFS) transactions for five public sector banks, including the four mentioned above. Bank of Maharashtra will decrease Government Stake via Qualified Institutional Placement (QIP) and other Banks will decrease Stake via OFS. [Click here to read in detail]

The Government of India is planning to reduce stake in 5 Public Sector Banks:

• Bank of Maharashtra
• Indian Overseas Bank (IOB)
• UCO Bank
• Central Bank of India
• Punjab and Sind Bank

Click here to read in detail.

In case of IDBI Bank, financial bids are expected to be invited between October and December 2025, with the aim of finalizing a buyer by the end of FY26, as per DIPAM Secretary Arunish Chawla. Government is planning to sell its stake in IDBI Bank at the earliest. Meanwhile, IDBI Bank employees are protesting agains the privatisation of Bank. Let’s see what happens in future.