The government on Friday announced a seven-pronged Indradhanush plan to revive PSBs fortunes.
Bank stocks were in huge demand on Monday, surging up to 17%, following the seven-pronged reform plan announced by the government on Friday, in order to revive the fortunes of public sector banks.
Defying an overall weak sentiment in the broader market, shares of Bank of Baroda had surged 15.15%, Canara Bank climbed 13.42%, Bank of India jumped 8.72%, Union Bank of India (5.29%), PNB (4.09%) and SBI (3.95%) on the BSE.
Among others, Allahabad Bank rose by 5.66%, Indian Overseas Bank gained 4.13% and Bank of Maharashtra was up 3.95%.
To revive the fortunes of public sector banks, government on Friday unveiled a seven-point plan, Indradhanush, encompassing Rs 20,000 crore immediate fund infusion, creation of a single holding company and minimising political interference.
Announcing the revamp plan that also includes setting up of a Bank Board Bureau (BBB) for broad-level appointments and a performance-based monitoring mechanism, Finance Minister Arun Jaitley also allayed fears of any panic over mounting bad debts at the state-run banks.
Under the plan, asset reconstruction companies will also be strengthened to deal with bad loan situation.
In order to professionalise PSBs, the government also announced appointment of two private sector bankers to head Bank of Baroda and Canara Bank while also making appointments to three other large state-run banks from within the government sector.
The government has decided to inject Rs 70,000 crore in PSBs in four-year period starting this fiscal with Rs 25,000 crore, of which Rs 20,000 crore would be given within a month.
The remaining Rs 5,000 crore would come in the last quarter of this fiscal.
The BSE Sensex ended the day with a loss of 189.04 points at 27,878.27.
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