Jan 4: Banking stocks moved up on Thursday morning trade as Union Government has sought an approval for raising additional Rs 80,000 cr through bank recapitalisation bonds in Parliament.
Canara Bank rose to a high of 365 as against previous close of 352.80 and trading 2.81% up at Rs 362.70, Bank of Baroda rose 4.12% to Rs 164.35 as against previous close of 157.85, State Bank of India rose 2.03% to Rs 309 as against previous close of Rs 302.85, Punjab National Bank rose 4.23% to Rs 173.65 as against previous close of 166.60.
The total package of Rs 2.1 trillion for recapitalisation announced a few months ago was meant to take care of the provisions of the public sector banks as well as provide them with growth capital.
This came as good news for several public sector banks stressed with non-performing assets and capital adequacy issues.
Bank recapitalisation strategy has been used in the past several times from 1980s and 1990s having rasied Rs 204 billion on that count.
Bank recapitalisation is expected to provide more liquidity to banks to extend more loans, thereby giving more credit to corporates and boost economic growth in the coming year.