For the second consecutive day, Indian Overseas Bank, Bank of India, Central Bank of India, and Bank of Maharashtra shares rose by as much as 20 percent on reports that the four mid-sized state-run banks were shortlisted by the government for privatization. In a report citing sources on Tuesday, the news agency Reuters referred to the four banks as potential candidates for privatization. Bank Of India, Bank of Maharashtra, and Indian Overseas Bank touched on the BSE, respectively, a 52-week high of 83.90, 22.85, and 15.70, while the Central Bank is heading towards its annual high. For its first round of privatisation to test the waters, the government is considering mid-sized to small banks. Some of the country's larger banks could also be looked at in the coming years, officials told Reuters.
However, the government will continue to hold a majority stake in the largest lender State Bank of India in India, which is seen as a 'strategic bank' to implement initiatives such as rural credit expansion. At a new high of 2,397.80, the Nifty PSU Bank Index gained more than 2 percent, led by gains in the four mid-sized banks. At the time, the BSE Sensex was trading 0.6 percent lower.