Shares of select public sector banks (PSBs) like Bank of India, IDBI Bank, Central Bank of India, Uco Bank, Dena Bank and Bank of Maharashtra were trading higher by up to 6% in early morning trade after the government has pumped in a combined capital of Rs 7,577 crore in these banks.
At 09:30 am, Nifty PSU Bank index was up 0.44% as compared to 0.11% decline in Nifty 50 index and 0.02% fall in Nifty Private Bank index.
On October 24, the government had approved a recapitalisation plan for strengthening NPA-hit state-run banks to a tune of Rs 2.11 lakh crore. This capital infusion is timely and would help these banks shore up their capital adequacy.
While IDBI Bank has got capital support of Rs 2,729 crore, followed by UCO Bank (Rs 1,375 crore), Bank of Maharashtra (Rs 650 crore), Central Bank of India (Rs 323 crore) and Dena Bank (Rs 243 crore).
In calendar year 2017, Dena Bank, Bank of Maharashtra, IDBI Bank, Central Bank of India and UCO bank recorded negative returns up to 23%. On comparison, the Nifty 50 index and Nifty PSU Bank index reported positive returns of 29% and 24%, respectively, till Friday.
|BANK OF MAHA||23.50||22.85||2.8|
|BANK OF INDIA||173.45||169.70||2.2|
|BANK OF BARODA||162.85||160.50||1.5|