Shares of state-run banks surged up to 8.5 per cent today after the finance ministry sought Parliament's nod for extra expenditure of Rs 80 billion towards their recapitalisation through bonds.
The scrip of UCO Bank soared 8.50 per cent, IDBI Bank surged 8.33 per cent, Punjab National Bank gained 5.97 per cent, Bank of India went up 3.83 per cent and Bank of Baroda jumped 3.77 per cent on BSE.
Among others, shares of Oriental Bank of Commerce rose 3.71 per cent, Canara Bank advanced 2.69 per cent, Bank of Maharashtra (2.39 per cent), Indian Bank (1.89 per cent) and State Bank of India (1.72 per cent).
"Release of the next instalment of funds earmarked for bank recapitalisation proved to be a shot in the arm for PSBs, especially as some of the weak banks had been hauled up by RBI for prompt and corrective action," said Anand James, Chief Market Strategist, Geojit Financial Services Ltd.
Parliament's approval has been sought for "meeting additional expenditure towards recapitalisation of Public Sector Banks through issue of government securities", said the finance ministry document.
The additional expenditure of Rs 80,000 crore towards bank recapitalisation through issue of government securities will be matched by additional receipts on issues of securities to the banks and "will not entail any cash outgo", it added.