Shares of public sector banks were trading higher on the National Stock Exchange (NSE), in an otherwise weak market, on Wednesday. The Nifty PSU Bank index rose 4 per cent in the morning deals on the NSE as against a 0.36 per cent decline in the benchmark S&P BSE Sensex.
According to media reports, the government is considering extending “ratna” title to PSBs like SBI, and Bank of Baroda. As per government rules, a public sector enterprise can be awarded ‘ratna’ title to give them financial autonomy. Currently, there are four categories of ‘PSU ratna’ in India, namely ‘miniratna-II’, ;miniratna-I’, ‘navratna’ and ‘maharatna’.
Among individual stocks, Punjab National Bank surged 5 per cent, followed by Bank of Baroda (up 4 per cent), State Bank of India (3.5 per cent), UCO Bank (3.3 per cent), and Bank of Maharashtra (3 per cent) on the NSE. Besides, Central Bank of India, Indian Bank, Canara Bank, J&K Bank, and Indian Overseas Bank were up in the range of 1.9 and 2.7 per cent at 9:47 am.
“RBI’s recent measures such as additional liquidity of Rs 5000 crore each to the NHB and the NABARD for supporting HFCs and NBFCs, respectively; extension of the earlier MSME restructuring scheme to March 2021; increase in the permissible LTV for gold loans for non-agricultural purposes from 75% to 90%; and review of PSL guidelines will optically curtail FY21E GNPAs, and consequently limit provisioning requirements, as accounts under the framework will be effectively restructured and classified as standard,” said analysts at HDFC Securities in a report dated August 7.
In its bi-monthly policy review on August 6, the RBI’s monetary policy committee unanimously voted to keep the policy rate unchanged at 4 per cent and maintained its accommodative stance.
Nifty Private Bnk index, meanwhile, slipped about half a per cent with HDFC Bank, Bandhan Bank, RBL Bank, and Axis Bank tradign as top lowers on the NSE, down between 1-1.5 per cent.
