Public sector banks stare at mounting losses, capital erosion6 min read . Updated: 12 Mar 2018, 05:30 PM IST
The increase in bond yields has hit most banks hard in this fiscal, but the villain of the piece is rising bad loans
Between 26 October, a day after the government announced a Rs2.11 trillion capital infusion into public sector banks (PSBs), and 8 March, shareholders of these banks have lost Rs1.56 trillion in combined market value. The market capitalization of the banks has dropped to Rs3.95 trillion from Rs5.51 trillion in this period. The government, which holds between 86.81% and 55.52% in these banks, is the biggest loser—the value of the stocks it owns is now lower by Rs97,386 crore, having dropped from Rs3.42 trillion to Rs2.45 trillion.
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