PSU banks rally; Bank of Baroda surges 17%

Shares of public sector undertaking (PSU) banks have rallied by up to 13% each on the bourses in early morning trades in an otherwise weak market after the government proposed to infuse capital in public sector banks and has roped in private sector professionals to run two of its largest banks — Bank of Baroda and Canara Bank.

Bank of Baroda, Bank of India (BoI), Punjab National Bank (PNB), Canara Bank, Indian Overseas Bank, IDBI Bank, Union Bank of India, Andhra Bank and State Bank of India (SBI) were up more than 3% each on the National Stock Exchange (NSE).

At 09:23 AM, the CNX PSU Bank index, the sole gainer among sectoral indices, was up 3.4% compared to a 0.83% decline in the CNX Nifty.

The government has launched a seven-pronged revamp plan to revive the ailing state-owned banks, including an Rs 20,000-crore capital infusion lifeline. Banks that are likely to benefit include names such as SBI, BoI, IDBI Bank, PNB, Canara Bank, IOB, Union Bank, Corporation Bank, Andhra Bank, Bank of Maharashtra, Allahabad Bank and Dena Bank.

Meanwhile, apart from Bank of Baroda and Canara Bank, the Financial Services Secretary Hasmukh Adhia has also announced names of managing directors (MDs) and CEOs of Bank of India, IDBI Bank and Punjab National Bank. These three executive heads are serving officials in other government-owned banks.

Among individual banks, Bank of Baroda has surged 17% to Rs 216 on the NSE in intra-day trades after the bank said the central government, after consultation with the Reserve Bank of India, has appointed Shri P. S. Jayakumar, Managing Director and CEO of VBHC Value Home Pvt. Ltd as head of the bank.

Bank Of Baroda