Shares of 25 PSU banks fell by 1.72% to 5.05% at 12:34 IST on BSE after Finance Minister Arun Jaitley said PSU banks would require Rs 2.40 lakh crore capital by 2018 to meet global Basel III norms.
Union Bank of India (down 5.05%), Indian Bank (down 5.04%), Indian Overseas Bank (down 4.49%), Bank of India (down 4.67%), Oriental Bank of Commerce (down 4.67%), Andhra Bank (down 4.19%), Allahabad Bank (down 3.58%), Bank of Maharashtra (down 2.75%), Corporation Bank (down 3.26%), Canara Bank (down 2.95%), State Bank of Bikaner and Jaipur (down 2.82%), Bank of Baroda (down 2.52%), United Bank of India (down 2.61%), State Bank of India (down 2.51%), UCO Bank (down 2.07%), Punjab National Bank (down 2.01%), IDBI Bank (down 1.92%), Vijaya Bank (down 2.02%), Dena Bank (down 2.01%), Jammu and Kashmir Bank (down 1.93%), Central Bank of India (down 1.55%), Punjab & Sind Bank (down 0.96%), Syndicate Bank (down 0.71%), State Bank of Mysore (down 1.44%) and State Bank of Travancore (down 1.72%), edged lower.
The S&P BSE Sensex was down 88.01 points, or 0.35% at 25,356.80.
To be in line with the Basel III norms, there is requirement to infuse Rs 2.40 lakh crore as equity by 2018 in public sector (PSU) banks. To meet this huge capital requirement, PSU banks need to raise additional resources to fill this obligation, Finance Minister Arun Jaitley said in the Budget speech in Parliament.
A large part of this fund would be raised through public offers made to retail customers, he said.
While preserving the public ownership, the capital of these banks would be raised by increasing the shareholding of capital in the phased manner through sale of shares largely through retail common citizen in the country, he said.
Thus, while the government would continue to hold majority shareholding, the citizen of India will also get direct shareholding in the bank which they currently hold indirectly, he added.
Besides, he said government would look into the issue of providing greater autonomy to the boards of banks.
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