Mumbai, December 3, 2025 — Shares of major public sector banks, including Indian Bank and Bank of Maharashtra, witnessed a sharp decline on Tuesday after the Finance Ministry issued a clarification on foreign direct investment (FDI) limits in PSU banks. The clarification dampened investor sentiment, triggering broad-based selling across the PSU banking space during intra-day trade.
Market analysts said the stocks fell as expectations of increased foreign investment and strategic stake dilution were temporarily put on hold following the ministry’s statement. The sudden correction erased recent gains in several PSU counters, even as experts maintained that the long-term fundamentals of public sector banks remain stable due to improving asset quality and stronger balance sheets.
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