Archive · 10 Dec 2025
PSU Bank Stocks Fall Amid FDI Clarification
Some big Indian banks, like Indian Bank and Punjab National Bank, have seen their stock prices drop a lot in the last few days.
This happened because the government said it won't increase the amount of money foreign investors can put into these banks.
Before this, people thought the government might allow more foreign investment, which made the bank stocks go up.
But now that the government has said no, the stocks are going down.
Even though some of these banks are still up for the year, the recent news has made investors worried and sell their shares.
PSU bank stocks fell sharply after the government clarified it won't raise the FDI limit to 49%.
Indian Bank is down 13% from its one-year high, and Punjab National Bank is down 8.65% from its recent peak.
Other banks like Bank of Maharashtra, Bank of Baroda, and Union Bank of India are also down 5-8% from their recent highs.
Despite the recent sell-off, most PSU banks are still up over 15% for the year, with Indian Bank leading with a 49% gain.
The government's clarification came after reports in October suggested a possible increase in the FDI limit, which had driven a rally in PSU bank stocks.
- Who
- Public Sector Banks (PSBs) in India, including Indian Bank, Punjab National Bank, Canara Bank, Bank of India, Bank of Maharashtra, Bank of Baroda, Union Bank of India, and State Bank of India
- What
- A significant sell-off in PSB stocks due to the government's clarification on FDI limits
- When
- The sell-off intensified on Monday, December 8, with some relief on Tuesday, December 9
- Where
- Indian stock market, specifically the Nifty PSU Bank index
- Why
- The government clarified that it is not considering a proposal to raise the FDI limit in PSBs to 49%, which had previously driven a rally in these stocks
- Indian Bank
- Down 13% from one-year high of ₹894.85
- Punjab National Bank
- Down 8.65% from recent high of ₹127.80
- Bank of Maharashtra
- Down 5-8% from recent peaks
- State Bank of India
- Down 4% from recent peak of ₹999
- FDI Limit in PSBs
- 20%
- FDI Limit in Private Banks
- 74% (49% automatic, 74% with approval)
- Indian Bank YTD Performance
- 49% gain
- Canara Bank YTD Performance
- 45% gain
- Bank of India YTD Performance
- 37% gain
- State Bank of India YTD Performance
- 21% gain
Sources
Indian Bank, PNB, Canara Bank and other PSU banks fall up to 12% from recent highs as sell-off intensifies
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