State-run banks surge as govt plans to cut stake

Shares of public sector banks hogged limelight today, surging as much as 8 per cent, following reports that the government is planning to bring down its stake in these companies.
SBI's scrip surged 5.10 per cent to settle at Rs 321.45, becoming the top gainer among 30-Sensex stocks.
Shares of PNB jumped 7.92 per cent, Canara Bank (7.67 per cent), Bank of Baroda rallied 7.23 per cent, UCO Bank (6.01 per cent), Bank of India (5.44 per cent) and Central Bank (2.51 per cent).
The government is planning to bring down its stake in public sector banks to 52 per cent, which can fetch the exchequer Rs 89,120 crore.

Minister of State for Finance Jayant Sinha told the Lok Sabha the government is "considering" to bring down its equity in the state-owned banks as it would reduce budgetary requirement for capitalisation of public sector banks (PSBs).
"The step would substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks," he said in a written reply.