Shares of public sector banks (PSBs) rallied up to 4% on Tuesday following reports that the government is set to fast-track the process of offloading its stake in select lenders.

Indian Overseas Bank share price surged as much as 4% to ₹38.99 apiece, while Central Bank of India shares rose 2.68% to ₹39.00. UCO Bank stock price gained 2.7% to ₹32.14, and Bank of Maharashtra shares advanced 2.8% to ₹56.15. Meanwhile, Punjab & Sind Bank share price added 3.4% to trade at ₹32.30 on the BSE.

According to a report by CNBC Awaaz, the government plans to accelerate the disinvestment process in public sector banks, with the appointment of merchant bankers in the final stages. The Centre aims to sell up to a 20% stake in five PSU banks over the next six months through Qualified Institutional Placement (QIP) and Offer for Sale (OFS) routes.

The proposed stake sale will involve UCO Bank, Bank of Maharashtra, Indian Overseas Bank, Central Bank of India, and Punjab & Sind Bank. Proceeds from the stake sale are expected to be utilised to meet the respective banks’ capital and operational requirements, the report added.