PSU banks in focus; CNX PSU Bank index up 2%

Union Bank, Canara Bank, Bank of India, Oriental Bank of Commerce, IOB and Andhra Bank are up 3-5% on NSE.

Banking shares mainly public sector undertakings (PSU) are in demand and trading higher by up to 5% on the National Stock Exchange on reports that the Finance ministry will take tough measures on rising scams in state-owned banks.

Union Bank of India, Canara Bank, Bank of India, Oriental Bank of Commerce, Indian Overseas Bank and Andhra Bank are up 3-5%, while State Bank of India, Punjab National Bank, Bank of Baroda, IDBI Bank and Allahabad Bank up 2% each on NSE.

CNX PSU Bank index, the largest gainer among sectoral indices, was up 2.2% compared to 0.5% rise in benchmark CNX Nifty at 1050 hours.

In the wake of rising scams in public sector banks, the Finance Ministry is looking at various steps, including strengthening of risk management, appointment of bank chiefs for longer tenures, separation of posts and better quality of nominee and independent directors.

The ministry has also asked banks to prepare a list of large borrowers with heavy debt so that these borrowers can be asked to sell off their non-core assets to reduce debt and increase their equity, the DNA report suggests.

Among the individual stocks, Union Bank of India up 5% to Rs 207, followed by Canara Bank (up 3.4% at Rs 391), Bank of India and Indian Overseas Bank are up 3% each at Rs 286 and Rs 65.60 respectively on NSE.