Shares of state-owned banks (PSBs) continued to rise for the fourth straight day on Thursday after the government on Monday announced plans to privately bank two PSU banks for the 2021-22 (FY22) financial year.
At 02:18 pm, the Nifty PSU Bank index was up 3 percent compared to less than one percent interest rate on Nifty50, Nifty Bank, and Nifty Private Bank indices. Over the past four days of trading, the Nifty PSU Bank index collected 18 percent compared to the 9 percent profit on the Nifty50 benchmark.
The Bank of India has hit a 52-week high of $ 120, an 18 percent increase in the NSE in intra-day trading after heavy volumes. Stocks accounted for 37 percent of the last four days of trading. Currently, it was trading 14 percent higher at Rs 116 with a combined 30 million shares that have changed hands on the NSE and BSE to date.
Canara Bank has increased by 6 percent to Rs 162, increased by 22 percent in the last four, and Bank of India has increased by 7 percent to Rs 57.95 today, with 16 percent so far this week. Punjab National Bank and Baroda Bank increased by 23 percent and 19 percent, respectively, at the same time.
Stocks in the financial sector, especially banks, have been on the rise since Finance Minister Nirmala Sitharaman proposed a split between the two PSBs when it presented Budget 2021. Also, FM has set aside Rs 20,000 crore to restructure the PSBs. The government will introduce amendments to the law so that these banks will be the shareholders in the current budget system. Of the Rs 1.75 trillion allocated for the next budget, the government expects Rs 1 trillion to come from the division of its allocation to PSBs and financial institutions.
With most of the asset quality pressures known and many PSU Banks well-designed, it can be easy to attract investors. While these banks have lost part of their lending, many of them have been able to increase sales well, especially in the post-Covid era as they gain it due to risky competition, analysts at Jefferies said.
The government and the Reserve Bank of India (RBI) have shown flexibility in allowing a foreign bank to withdraw money from an Indian bank and build a wider branch in India. With Lakshmi Vilas Bank, DBS has added more than 500 branches to its Indian footprint compared to just 35 before. It jumped – had the largest foreign banks in India with branches.