Ambiguity In NPA Act Erodes Bank Stocks

Mumbai, Aug 29: | Updated: Aug 30 2003, 05:30am hrs
Banking stocks lost their early gains on the bourses and settled lower in the last half hour of trading in the range of 1-3 per cent on ambiguity over Securitisation Act. The share prices of most PSU banks including State Bank of India (SBI), Canara Bank, Bank of Baroda (BOB) and Punjab National Bank (PNB) declined as they had run sharply up last week after the repo rate cut.

On the BSE the stock of SBI fell by 1.70 per cent, BoB depreciated by 3.20 per cent, Canara Bank lost 2.51 per cent and PNB declined by 2.66 per cent.

On NSE SBI dropped by 0.87 per cent, BoB lost ground by 2.70 per cent, Canara Bank slipped 2.12 per cent and PNB fell by 1.81 per cent.

Market analysts are of the view that the Supreme Court (SC) judgement regarding the Securitisation Act which is likely to be announced on Monday might not be in favour of borrowers. Said an analyst: There are reports that the SC has asked the auditor general and the financial institutions to relook at the securitisation act which is supposedly not in favour of borrowers. According to a BSE broker,Relooking the securitisation act means that the non-performing assets of banks may not come down.