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PSU banks trade mixed ahead of RBI board meet outcome

Nifty PSU Bank index, the largest loser among sectoral indices, was down 0.82% at 12:07 PM; after gaining 5% in past four trading days on the NSE till Friday.

SI Reporter  |  Mumbai 

PCA Banks
PCA Banks

Shares of public sector banks (PSBs) were trading on a mixed note ahead of the Reserve Bank of India (RBI) board meeting today.

Bank of Maharashtra, Syndicate Bank, Vijaya Bank and Central Bank of India were up 2% each, while Dena Bank, Andhra Bank, Bank of Baroda, Corporation Bank, Indian Overseas Bank and Allahabad Bank were up 1% each.

However, State Bank of India, Oriental Bank of Commerce, Bank of India, Union Bank of India and Canara Bank were down in the range of 1% to 3% on the NSE.

At 12:07 PM; Nifty PSU Bank index, the largest loser among sectoral indices, was down 0.82%, as compared to 0.26% rise in the Nifty 50 index. In the past four trading days, the PSU bank index had gained 5%, against 0.94% rise in the benchmark index.

Over the past few days, the government and the RBI have had discussions in a bid to arrive at a common ground on at least two demands of the government — easing prompt corrective action framework (PCA) norms for some banks along with aligning the regulatory capital requirement of banks with international norms and a special dispensation for micro, small and medium enterprises (MSMEs).

According to Business Standard report, the RBI may agree to bring some PSBs out of the PCA, but it is not likely to accede to the government’s demand to set up a special refinance window for non-banking financial companies (NBFCs) at the board meeting of the central bank on Monday.

Some banks may be brought out of the PCA framework, an early warning tool used by the RBI, if the government agrees to the central bank’s terms related to fulfilling their capital needs, added reported quoting sources. CLICK HERE TO READ FULL REPORT

According to CARE Ratings, the NPA ratio of PCA banks has increased from 16.0% in March 2017 to 20.5% in March 2018 and is marginally up now to 21.0% in September.

“Given the restrictions on further lending it may be conjectured that this increase has been due to the recognition process. It is still uncertain whether the NPA levels have peaked or whether there could be new additions in the coming months. The absolute levels are lower in Q1 and Q2 compared with Q4 of last year but due to shrinking of the size of the loan book has increased as a ratio,” the rating agency said in a report.

State-owned banks currently under PCA are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

1-year high 1-year low
Bank Date Price Date Price Price* % gain#
Oriental Bank 25/01/2018 136.35 09/10/2018 58.00 91.75 58.2
I O B 05/01/2018 25.40 08/10/2018 10.85 15.00 38.2
Union Bank (I) 17/11/2017 181.00 26/10/2018 61.25 82.60 34.9
Corporation Bank 24/11/2017 44.60 08/10/2018 20.90 27.75 32.8
Allahabad Bank 17/11/2017 82.00 09/10/2018 33.15 43.35 30.8
IDBI Bank 05/03/2018 91.50 05/07/2018 47.00 60.90 29.6
Canara Bank 21/11/2017 401.70 23/10/2018 204.75 263.70 28.8
UCO Bank 25/01/2018 36.65 08/10/2018 15.25 19.40 27.2
Bank of Maha 28/11/2017 28.80 11/10/2018 10.70 13.60 27.1
United Bank (I) 29/12/2017 19.50 08/10/2018 8.90 11.30 27.0
Bank of Baroda 17/11/2017 191.85 11/10/2018 91.00 115.20 26.6
Punjab Natl.Bank 17/11/2017 200.90 28/09/2018 58.45 73.20 25.2
St Bk of India 17/11/2017 346.70 23/03/2018 232.35 290.90 25.2
Dena Bank 25/01/2018 27.85 17/07/2018 13.70 16.55 20.8
Syndicate Bank 27/11/2017 95.90 09/10/2018 29.50 35.60 20.7
Bank of India 17/11/2017 216.80 25/10/2018 73.20 88.15 20.4
Pun. & Sind Bank 24/11/2017 51.45 01/10/2018 25.00 29.75 19.0
Andhra Bank 17/11/2017 67.55 29/10/2018 25.25 28.80 14.1
Central Bank 17/11/2017 94.00 11/10/2018 27.45 31.10 13.3
Indian Bank 17/11/2017 427.40 24/10/2018 210.40 229.15 8.9
Vijaya Bank 24/11/2017 76.60 22/10/2018 39.95 43.30 8.4
*Price on NSE in Rs as on November 16, 2018 # % change over 52-week low price
Source: CapitalinePlus

First Published: Mon, November 19 2018. 12:21 IST
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