Investment norm change cheers PSU banks

DALAL STREET SPIKES

PSU bank stocks ended firm after the Reserve Bank of India (RBI), on Thursday, relaxed rules governing the investment portfolios of banks, in a move to cushion the balance sheets of these banks from huge losses following a recent spike in government bond yields.

Leader State Bank of India was up 2.25 per cent to Rs 462.15 on the back of strong volumes of over 25 lakh shares on the BSE alone.

The other notable gainers were Bank of Baroda up 6.72 per cent to Rs 174.80, Indian Overseas Bank up 4.98 per cent to Rs 48.45, Vijaya Bank up 3.73 per cent to Rs 48.65, Corporation Bank up 3.55 per cent to Rs 259.90, Punjab National Bank up 2.74 per cent to Rs 277.05 and Oriental Bank of Commerce up 2.04 per cent to Rs 237.80.

RBI's new norms allow banks to defer booking paper losses on depreciation on their investment in government bonds.