Hedge fund manager Samir Arora is cautious on PSU Bank shares, so much so that he has said he is not buying any of it. Indian stock markets have performed better than expected recently despite the pessimism over the unravelling of nation\u2019s biggest banking fraud at Punjab National Bank and the imposition of tax on LTCG (Long-Term Capital Gain), Samir Arora of Helios Capital said in an interview to CNBC TV18. However, he also said: \u201cI will continue to stay away from PSU banks.\u201d Since the time PNB has informed about the Rs 11,400 crore fraud (which has since expanded to ~ Rs 13,600 crore), PSU bank stocks have been reeling under pressure. Some of these PSU bank stocks are tumbling on having the exposure to the scam. Some public sector banks, such as UCO Bank, Union Bank of India and Allahabad Bank, have confirmed that they have extended buyer\u2019s credit to Nirav Modi group companies on the basis of \u201cfraudulent and unauthorised\u201d LoU (Letters of Understanding) issued by some rogue employees of Punjab National Bank. Separately, in the Budget 2018, Finance Minister Arun Jaitley proposed to introduce a 10% tax on the LTCG on equity and equity oriented mutual funds, giving a jolt to the Indian equity markets. On LTCG on equities being taxed at 10% without the benefit of indexation, Samir Arora said, \u201cimposing LTCG was a wrong move by the government\u201d. In the Union Budget 2018, Arun Jaitley brought the LTCG from equity and equity oriented mutual funds under the tax net effective from April 2018. During the day when Arun Jaitley introduced LTCG, a knee-jerk reaction was seen in Indian markets with Sensex plunging as much as 463.28 points intraday to low of 35,501.74. Over the course of last one month, shares of Punjab National Bank have plummeted about 40%, while the stock of Gitanjali Gems had slumped over 75% in the same period. Gitanjali Gems, along with Nirav Modi group companies is under probe by investigative agencies such as Enforcement Directorate, the Central Bureau of Investigation and the anti-fraud agency SFIO (Serious Fraud Investigation Office).