PSU bank stocks continue rally on Budget proposals

Shares of PSU banks continued their rally for the second straight session, rising as much as 4 per cent, after the government proposed tax concession on provisions for Non Performing Assets or bad loans.
Allahabad Bank jumped 4.01 per cent, Syndicate Bank surged 3.45 per cent and Bank of India gained 3.43 per cent on BSE.
Among others, shares of Bank of Baroda rose by 2.60 per cent, Indian Bank gained 2.06 per cent, PNB went up by 1.57 per cent, and State Bank of India (0.89 per cent).
These stocks had gained as much as 5 per cent in the previous session as well.

The government also proposed that tax on interest will be levied on actual receipts and not on accrual basis in respect of NPA accounts.
Presenting Union Budget 2017-18 in Parliament yesterday, Finance Minister Arun Jaitley said: "In order to give a boost to banking sector, I propose to increase allowable provision for Non-Performing Asset from 7.5 per cent to 8.5 per cent. This will reduce the tax liability of banks."
Jaitley also announced that Rs 10,000 crore will be infused in public sector banks in the next fiscal and more will be provided if required.