Almost all PSB (public sector bank) shares got a kick in the late afternoon trades on Wednesday as Finance Minister Arun Jaitley detailed about Rs 2.11 lakh crore PSU bank recapitalisation plan in a press conference today. Ahead of the presser, shares of prominent banks such as IDBI Bank, Punjab National Bank, State Bank of India, Bank of Baroda surged up to 6%. The benchmark Nifty PSU Bank index shot up 3.49% to conclude at 3,965.6 led by a rise in heavyweight shares India’s largest lender State bank of India, PNB and Bank of Baroda. The stock of SBI rose as much as 3.88% to finish at Rs 330.45 while the stock of IDBI Bank emerged as the biggest gainer out of the Nifty PSU Bank index components.
The Finance Ministry on Wednesday tightened the noose on public sector banks (PSBs), saying that the massive Rs 2.11 lakh crore bank recapitalisation announced by the government will alongside reforms by the banks to ensure that the banking crisis does not get repeated. In October last year, the Union Cabinet approved an unprecedented Rs 2.11 lakh crore for recapitalisation of banks over the next two years in a bid to clean banks’ books and revive investment in a slowing economy.
Finance Secretary Rajiv Kumar laid down 6-point reforms for the PSBs and said their performance will be under the annual assessment. Of the 21 PSBs, IDBI will be getting the highest capital of Rs 10,610 crore from the government. Out of the total PSU banks IDBI Bank emerged as the biggest beneficiary today as the bank was allocated a whopping Rs 10,610 crore followed by Bank of India (Rs 9,232 crore), SBI (Rs 8,800 crore), UCO Bank (Rs 6,507 crore) and Central Bank (Rs 5,158 crore).
Meanwhile, Indian stock markets ended at record highs on Wednesday with Sensex and Nifty mounting fresh closing peaks led by an uptick in shares of SBI, ITC, HDFC, TCS, HDFC Bank, Infosys and Yes Bank. Though, Sensex and Nifty closed almost flat as compared to their today’s opening levels. The benchmark Sensex closed up 21.66 points or 0.06% at 36,161.64 after opening at 36,161.62 and NSE Nifty settled 2.3 points or 0.02% higher at 11,086 after opening down 14.35 points at 11,069.35. Stocks of telecom companies including Airtel and Idea were the major laggards on Wednesday after Reliance Jio Infocomm surprised with the Republic Day tariffs. During the day, Sensex added as much as 128.21 points to hit an all-new lifetime high of 36,268.19 while Nifty advanced 26.4 points to a fresh record high of 11,110.1.