PSU banks gain as Cabinet clears amendments to bankruptcy code

Shares of public sector banks (PSBs) gained up to 4% on the National Stock Exchange (NSE) in intra-day trade following news reports that the Cabinet cleared amendments to insolvency and bankruptcy code to prevent wilful defaulters from bidding for stressed assets.

The Nifty PSU Bank index, the second largest gainer among sectoral indices, ended 1% higher at 4,045, as compared to 0.15% rise in the Nifty 50 index. The index hit a high of 4,092, up 2.4% on the NSE in intra-day trade.

State Bank of India (SBI), Punjab National Bank, Canara Bank, Indian Bank, IDBI Bank and Oriental Bank of Commerce were up in the range of 1% to 2%.

"Preventing wilful defaulters from bidding for stressed assets will help banks get better prices for the assets and will move the pending cases faster," told A K Prabhakar, head of Research, IDBI Capital to Reuters.

(With inputs from agencies)