PSU Banks Rise On Rs. 23,000 Crore Fund Infusion

PSU Banks Rise On Rs 23,000 Crore Fund Infusion
Shares of state-run lenders such as State Bank of India, Punjab National Bank, Bank of India, Canara Bank, Allahabad Bank, Indian Overseas Bank, Syndicate Bank and Bank of Baroda advanced 1-4 per cent today after the government announced Rs. 22,915 crore fund infusion as part of first tranche of bank recapitalization of 13 lenders.

State Bank of India will get Rs. 7,575 crore while Punjab National Bank Rs. 2,816 crore and Bank of India Rs. 1,784 crore.

Canara Bank will get fund infusion of Rs. 997 crore, Central Bank of India Rs. 1,729 crore and Syndicate Bank Rs. 1,034 crore.

Among other PSU banks, Dena Bank will get Rs. 594 crore, United Bank of India Rs. 810 crore, UCO Bank Rs. 1,033 crore and Coporation Bank Rs. 677 crore.

The government had last year announced a revamp plan, ‘Indradhanush’, to infuse Rs. 70,000 crore in state-owned banks over four years.

For the current fiscal year, Finance Minister Arun Jaitley has budgeted Rs. 25,000 crore for bank recapitalisation.

Banking analyst Hemindra Hazari said that the current round of fund infusion is a “good starting point” for state-run banks which are reeling under high levels of bad assets.

As of 12:50 p.m., PSU banking shares sub-index was up 1.1 per cent, outperforming the Nifty which was trading on a flat note.