Stocks of Industrial Development Bank of India (IDBI) shot up by 15% as Finance Minister Nirmala Sitharaman announced that the government will divest its remaining stake in the bank via stock exchanges. The government’s divestment target for Financial Year 2020-21 has been pegged at a staggering FY21 Rs 2.1 lakh crore, the target for FY 20, which the government failed to achieve was kept at Rs 1.05 lakh crore.
Soon after the Finance Minister announced the government’s decision to see its entire stake in IDBI Bank stocks of the banks jumped by as much as 17% to trade at Rs 39.90. The share opened at Rs 33.80 and gained mildly in the hours prior to the budget.
Budget 2020 also proposed to increase deposit insurance from Rs 1 lakh to Rs 5 lakh. This move will help depositors in the banks as far safety of the money is concerned. The bank deposits are insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. In another move aimed to protect depositors, the Budget proposed amending the Banking RegulATION Act to strengthen cooperative banks.
IDBI Bank Ltd is currently trading at Rs 38.10, up by Rs 4.2.
Domestic equity benchmarks BSE Sensex and Nifty 50 were trading volatile as FM Sitharaman began her Budget speech. Nirmala Sitharaman in her Budget speech also announced that the government is planning to sell a part of holding in public sector behemoth Life Insurance Corporation of India (LIC).
At Around 1 PM, the S&P BSE Sensex was trading 697 points or 1.71 per cent lower at 40,026 points while the broader Nifty 50 index, slipped below the 12000 mark, and was ruling at 11,794, down 167 points or 1.40 per cent. SBI, HDFC, and L&T were among the top losers on Sensex. 26 out of 30 Sensex stocks were trading in red.