Bank Nifty rose to a new all-time high today, topping the 22,000-mark for the first time ever, with major constituents HDFC Bank, Kotak Mahindra Bank, IndusInd bank, Federal Bank and Canara Bank too making their new all-time highs, buoyed by the prospects of strong financial earnings and the government’s resolve to solve the problem of NPAs. The state-run Indian Bank, which is not a part of Bank Nifty, also made a new all-time high today.
Bank Nifty, NSE’s benchmark index for banking stocks, gained 1.07% or 235.85 points in the intraday trade to touch the all-time high of 22,019.55 points. The biggest private sector lender HDFC Bank rose 0.81% to make a fresh all-time high at Rs 1,545.5. The lender is on the gaining streak since the announcement of the healthy quarterly results last week. Another private lender Kotak Mahindra Bank too rose 0.92% to a new all-time high of Rs 904.
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Similarly, IndusInd Bank rose 1.84% to Rs 1,460, while Federal Bank jumped 2.2% to Rs 95. Two state-run banks also shone. Canara Bank rose 1.99% to touch its all-time high at Rs 335.35. The smaller Indian Bank skyrocketed 11.7% making an all-time high of Rs 318.4, after an impressive fourth quarter financial result, which showed that the net profit tripled to Rs 3.2 billion and the gross NPAs (non-performing assets) fell to 7.47% at the end of March from 7.69% at the end of the preceding quarter.
Today, Finance Minister Arun Jaitley said that the government was giving top priority to addressing the issue of bad loans. He said the magnitude of the NPAs problem is essentially limited to 20-30 big accounts. “It’s not a problem spread over hundreds of thousands of accounts… And it’s not impossible for a large economy like India to resolve 20 to 30 accounts. So it’s not an insurmountable problem,” Jaitley said at the Council on Foreign Relations. “I think it’s just persisted too long, but it’s certainly adversely impacting us,” he added.
Jaitley said that the resolution of NPAs is the government’s “top priority” at the moment and is its “one very big challenge” going forward, PTI reported.
The Reserve Bank of India has introduced several guidelines and schemes under which the banks have been empowered, Jaitley said, adding that there is now an insolvency law in place. Further, the government has another action in the pipeline for resolving the issue of the NPAs, he said.