Newly-appointed Finance Minister Nirmala Sitharaman, proposed in her maiden budget speech that the public sector lenders would be provided budgetary support of Rs 70,000 crore for recapitalisation. Analysts expected capital infusion in the range of Rs 35,000-40,000 crore.
Shares of State Bank of India (SBI) hit a new high of Rs 373, up 2 per cent on the NSE in the intra-day trade on Friday. Canara Bank, Corporation Bank, Bank of Baroda, Bank of India, Punjab National Bank (PNB) and Union Bank of India were up 1 per cent to 4 per cent in intra-day trade today.
At 01:53 pm, Nifty PSU Bank index, the largest gainer among sectoral indices, was up 1.4 per cent, as compared to a 0.68 per cent decline in the Nifty 50 index. Nifty Bank and Nifty Private Bank indices were up 0.11 per cent and 0.02 per cent, respectively.
The Rs 1 trillion reduction of non-performing assets (NPAs) in banks is a very healthy trend to clean the ill of the banking industry. The additional provision of Rs 70,000 crore to the capital of the public sector banks will also ensure additional restoration of financial confidence, said- NV Raman, Partner/ Indirect Tax, BDO India.