NEWS HOUR 23rd Oct– 29th Oct 2017
Weekly News Magazine
PSB STOCKS LIGHT UP D-STREET ON RE-
CAPITALISATION PLAN Report by - Rajesh Khanna
Indian government’s 2.11 trillion rupees recapitalization plan for public sector banks is considered as a bailout and a financially engineered way to partially solve the NPA problem. Soon after the recapitalization announcement on Wednesday, Bank stocks were on fire and owing to the gains in these stocks; BSE bank index rose by 4.71% to finish at 28,329.12 The top gainers among PSBs Punjab National Bank (46.20%), Bank of India (33.96%), Bank of Baroda (31.47%) and State Bank of India (27.58%). Among the private lenders, ICICI Bank rose by 14.69% and AXIS Bank up by 4.61%. The surge in bank stocks increased BSE 30-share index by 435.16 points to close at 33,042.50. In recapitalization plan, the government will buy Rs18,000 crore shares of public sector banks and then PSBs will be allowed to raise Rs58,000 crore from the market. The government also planned to issue “Bank Recapitalization Bonds” for Rs1,35,000 crore which will be invested to buy more shares in PSBs within a time frame of 2 years. This adds up to a total of Rs2,11,000 crore which is even more than Reliance Jio’s debt. The primary reason for recapitalization plan is to improve PSBs capital ratios such that they can have a steady credit growth and induce confidence in the domestic banking system. The move is also aimed to decrease stressed advances – particularly consortium loans but interest costs are expected to increase along with the increase in aggregate debt levels.
Source : WEB
The top gainers include PNB, SBI, Bank of Baroda and Bank of India
In This Issue •
PSB stocks light up D -street on recapitalization plan
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Air India privatization
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IDFC to exit infrastructure and PE funds businesses
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SBI initiates bankruptcy proceedings against subsidiary of Amtek Auto Ltd
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The Economic stimulation