Nifty PSU Bank index gains for sixth straight session; PNB, BOI up 3%

In past six trading days, Nifty PSU Bank index up 7% against 3% rise in the benchmark index.

Shares of public sector undertaking (PSU) banks were trading higher for the sixth straight trading session after Shaktikanta Das was named as the 25th governor of the Reserve Bank of India (RBI) last week.

Oriental Bank of Commerce, Bank of India, Union Bank of India, Syndicate Bank, UCO Bank, Central Bank of India, Canara Bank, Indian Bank and Allahabad Bank were up in the range of 2% to 4% in an otherwise weak market.

At 11:17 am; Nifty PSU Bank index, the largest gainer among sectoral indices, was up 0.85% at 3,008 points, as compared to a 0.57% decline in the Nifty 50 index. In the last six trading days, Nifty PSU Bank index gains 7% against 3% rise in the benchmark index.

The RBI board at their meeting held on Friday, December 14, did not arrive at any decision but held extensive discussions on the governance structure in the RBI and the liquidity situation of non-banking financial companies (NBFCs) — two key areas of concern flagged by the finance ministry recently, according to a media report.

There was no discussion on the prompt corrective action (PCA) framework, which the government had asked the RBI to consider revising and bring some public sector banks (PSBs) out of it.

The Board for Financial Supervision, led by the RBI governor, is expected to review the PCA framework in its next meeting. At present, 11 PSBs and one private bank are under the PCA framework and the government feels that it is affecting the credit flow.

According to a PTI report, the government is considering additional capital infusion of up to Rs 300 billion in public sector banks (PSBs) as they have been unable to raise required funds from the markets. CLICK HERE TO READ FULL REPORT

In the past one week, shares of Punjab & Sind Bank, Bank of India (BOI), Syndicate Bank, Oriental Bank of Commerce and Union Bank of India have rallied more than 10%, while Punjab National Bank (PNB), Indian Bank, Central Bank of India, Canara Bank, Vijaya Bank, Bank of Maharashtra, Andhra Bank and Allahabad Bank were up in the range of 6% to 10%.

COMPANY	LATEST	1-WEEK BEFORE	GAIN(%)
PUN. & SIND BANK	31.40	27.30	15.02
BANK OF INDIA	91.25	79.75	14.42
SYNDICATE BANK	35.30	31.35	12.60
ORIENTAL BANK	92.75	83.75	10.75
UNION BANK (I)	81.00	73.45	10.28
PUNJAB NATL.BANK	75.40	68.60	9.91
INDIAN BANK	242.65	221.40	9.60
CENTRAL BANK	31.30	28.65	9.25
CANARA BANK	269.70	248.15	8.68
VIJAYA BANK	44.60	41.30	7.99
UNITED BANK (I)	10.93	10.14	7.79
BANK OF MAHA	13.61	12.64	7.67
ANDHRA BANK	28.85	26.80	7.65
ALLAHABAD BANK	47.00	44.30	6.09
I O B	14.94	14.12	5.81
UCO BANK	19.50	18.70	4.28
BANK OF BARODA	113.15	108.75	4.05
ST BK OF INDIA	290.35	281.20	3.25
DENA BANK	16.55	16.15	2.48
CORPORATION BANK	28.10	27.45	2.37