Select PSU banks extend rally; Central Bank, Dena Bank surge 10%

Nifty PSU Bank rallied 6.5% as compared to less than 1% rise each in the Nifty Bank and Nifty 50 in past four trading sessions.

Shares of select public sector undertaking (PSU) banks continue to move north for the fourth straight trading sessions after the Reserve Bank of India (RBI) came out with a scheme for resolution of bad loans of large projects wherein a portion of the debt will be converted into equity or other instruments.

Dena Bank (up 13% at Rs 37), Central Bank of India (up 12% at Rs 105), Bank of Maharashtra (9% at Rs 34), Vijaya Bank (7% at Rs 37), and United Bank of India (6% at Rs 22) were up more than 5% each on the National Stock Exchange (NSE).

Oriental Bank of Commerce, Indian Overseas Bank, Corporation Bank, Punjab National Bank and Uco Bank were up 2%-4% at 03:27 PM.

In past four trading sessions, the Nifty PSU Bank rallied 6.5% as compared to less than 1% rise each in the Nifty Bank index and Nifty 50 index.

RBI on Monday came out with a scheme for resolution of bad loans of large projects wherein a portion of the debt will be converted into equity or other instruments under supervision of IBA's Overseeing Committee. The Scheme for Sustainable Structuring of Stressed Assets (S4A) will cover those projects which have started commercial operations and have outstanding loan of over Rs 500 crore.

Meanwhile, the Union Cabinet on Wednesday gave a go-ahead to the merger of five associate lenders and Bharatiya Mahila Bank with State Bank of India (SBI).

Analysts say that the merger with associate banks has been one of the long-pending agendas and has come in earlier than what the Street was expecting. LINK.

Bank	13/06/2016	17/06/2016	% Chg
State Bank of Mysore	453.45	696.70	53.64
State Bank of Travancore	392.50	552.00	40.64
State Bank of Bikaner & Jaipur	500.30	697.65	39.45
Dena Bank	29.55	36.00	21.83
United Bank of India	18.15	21.80	20.11
Central Bank of India	87.95	105.45	19.90
Vijaya Bank	31.35	37.20	18.66
Punjab & Sind Bank	44.30	52.30	18.06
Indian Bank	105.35	124.30	17.99
Punjab National Bank	82.95	94.55	13.98
Bank of Maharashtra	28.90	32.85	13.67
Corp Bank	35.35	40.10	13.44
Allahabad Bank	52.05	58.15	11.72
Oriental Bank of Commerce	89.10	99.45	11.62
Andhra Bank	50.00	54.65	9.30
Syndicate Bank	66.00	71.90	8.94
UCO Bank	36.15	39.10	8.16
IDBI Bank Ltd	66.65	71.70	7.58
Bank of India	87.50	94.05	7.49
Union Bank of India	118.60	126.75	6.87
State Bank of India	202.20	214.40	6.03
Jammu & Kashmir Bank	64.60	68.20	5.57
Canara Bank	192.50	202.25	5.06
Indian Overseas Bank	25.80	26.85	4.07
Bank of Baroda	145.90	150.55	3.19
Price on BSE in Rs
Latest price at 03:21 PM