Shares of Punjab National Bank and Bank of Baroda Ltd rise more than 2.5 percent each.
Indian govt is working on next round of consolidation, which could see PNB and BoB taking over smaller lenders, Economic Times reports, citing a senior finance ministry official.
No decision has been made as yet and plans are only at proposal stage, report adds.
Punjab & Sind Bank can be merged into PNB, and big lenders like BoB can take over banks like Indian Overseas Bank, report says, citing the official.
Shares of Punjab & Sind Bank and Indian Overseas Bank jump as much as 6.35 percent and 5.23 percent, respectively.
Earlier this month, country's largest lender State Bank of India merged five subsidiary banks with itself, in a move seen as the beginning of consolidation in India's public sector banks.
Nifty PSU bank index gains up to 2.16 percent, touching its highest since Aug 2015.
