Nifty PSU Bank index rallies 4% ahead of PM Narendra Modi's review meeting

UCO Bank, Central Bank of India and Bank of Maharashtra surged more than 5%, while Bank of India, Union Bank of India, PNB, IOB, Bank of Baroda and SBI were up in the range of 2% to 4% on the NSE

Shares of public sector banks were in focus on Wednesday ahead of Prime Minister Narendra Modi's scheduled meeting with the chief executives of state-owned and private banks. Nifty PSU Bank index gained as much as 3.7 per cent in an otherwise subdued market in the intra-day trade today, while Nifty Bank index added 1 per cent.

At 12:27 pm, Nifty PSU Bank index was up 3.3 per cent, as compared to 0.18 per cent decline in the Nifty50 index. Nifty Bank and Nifty Private Bank indices, on the other hand, were up 1 per cent each.

UCO Bank, Central Bank of India and Bank of Maharashtra were up more than 5 per cent, while Bank of India, Union Bank of India, Punjab National Bank, Indian Overseas Bank, Bank of Baroda and State Bank of India (SBI) were up between 2 per cent and 4 per cent on the National Stock Exchange (NSE).

This is the first meeting that PM Modi will hold with the brass of financial institutions after the Covid-19 pandemic hit the country. The meeting will be held through video conferencing, a bank executive told Business Standard.

“The agenda of the meeting hasn’t been circulated yet. But it is expected that the PM will discuss credit flow to the economy, especially the micro, small and medium enterprises (MSMEs), and map the progress of the government’s Covid-19 package,” another bank executive said, requesting anonymity, added report. CLICK HERE TO REPORT

Meanwhile, 15th Finance Commission Chairman N K Singh said on Monday that there was a need for far more significant and decisive banking recapitalisation plan.

“India will see a sharp V-shaped recovery in the third and fourth quarter of the current fiscal, but FY21 GDP growth would ultimately be in the negative territory as the coronavirus lockdown has led to serious demand and supply dislocations”, N K Singh said.

"I think over the next five years, there is huge public outlay which will be needed to keep PSU bank adequately recapitalised," he added. CLICK HERE TO READ FULL REPORT