PSBs gain up to 17% as SC sets aside NCLAT judgement in Essar Steel case

Shares of public sector banks (PSBs) inched higher at the bourses on Friday, with the Nifty PSU Bank index gaining more than 3 per cent after the Supreme Court said the NCLAT cannot interfere with the commercial decisions taken by banks in Essar Steel case.

According to reports, while pronouncing the judgement, the Court set aside the NCLAT's judgment and said there was "no doubt that the ultimate discretion on distribution is with Committee of Creditors (CoC)".

"If NCLT finds that legal parameters are not met, it can send it back to Committee of Creditors, but it cannot tinker with the plan," reports said. Further, TV reports said the apex court relaxed timeline of 330 days prescribed in the Insolvency and Bankruptcy Code (IBC). READ REPORT HERE

Individually, Corporation Bank surged 17 per cent, while Central Bank of India rallied 11 per cent on the National Stock Exchange (NSE). Syndicate Bank, Bank of India, Canara Bank, Indian Overseas Bank, Punjab National Bank (PNB) and Oriental Bank of Commerce were up between 5 per cent and 7 per cent.

At 10:25 am, the Nifty PSU Bank index, the largest gainer among sectoral indices, was up 4 per cent at 2,477 points. In comparison, the benchmark Nifty 50 index was up 0.70 per cent, while the Nifty Bank and Nifty Private Bank indices were up 1 per cent each.

Shares of State Bank of India (SBI) gained up 4 per cent to Rs 319 on the NSE. The counter has seen a huge trading volumes with a combined 24.9 million shares changed hands on the NSE and BSE so far.

While announcing September quarter results last month, on recoveries, SBI chief Rajnish Kumar said, “By November 15, the bank is expecting a final judgement on Essar Steel and some other cases and is expecting a recovery of Rs 17,000 crore, which is over and above the normal recovery for the coming quarter.”

Meanwhile, in a regulatory filing, SBI announced the approval for divestment up to 4 per cent in SBI Cards through an initial public offering (IPO).

The Executive Committee of the Central Board of Directors (ECCB) of the Bank at its meeting held on Thursday accorded final approval, for divestment of SBI stake in SBI Cards upto 4 per cent through IPO by way of offer for sale of upto 37.29 million equity shares subject to the regulatory approval.