BackPSU bank stocks in huge demand, Bank of Baroda jumps 15%
Canara Bank climbs 13.42%, Bank of India jumps 8.72%, Union Bank of India 5.29%, Punjab National Bank 4.09% .and State Bank of India 3.95%
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Mumbai: Bank stocks were in huge demand on Monday, surging up to 15%, following a slew of reform measures announced in order to revive the fortunes of the public sector lenders.
Defying an overall weak sentiment in the broader market, shares of Bank of Baroda surged 15.15%, Canara Bank climbed 13.42%, Bank of India jumped 8.72%, Union Bank of India (5.29%), Punjab National Bank (4.09%) .and State Bank of India (3.95%) on BSE Ltd.
Among others, Allahabad Bank rose 5.66%, Indian Overseas Bank gained 4.13% and Bank of Maharashtra was up 3.95%.
To revive the fortunes of public sector banks, the government on Friday unveiled a seven-point plan encompassing ₹ 20,000 crore immediate fund infusion, creation of a single holding company and minimizing political interference.
Announcing the revamp plan, named ‘Indradhanush’, that also includes the setting up of a bank board bureau (BBB) for broad-level appointments and a performance-based monitoring mechanism, finance minister Arun Jaitley also allayed fears of any panic over mounting bad debt at state-run banks.
Under the plan, asset reconstruction companies will also be strengthened to deal with bad loan situation. In order to professionalise PSBs, the government also announced appointment of two private sector bankers to head Bank of Baroda and Canara Bank while also making appointments to three other large state-run banks from within the government sector.
The government has decided to inject ₹ 70,000 crore in PSBs in four-year period starting this fiscal with ₹ 25,000 crore, of which ₹ 20,000 crore would be given within a month. The remaining ₹ 5,000 crore would come in the last quarter of this fiscal.
The BSE Sensex ended the day with a loss of 189.04 points at 27,878.27.
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