Public banks' shares tumble on Economic Survey's privatisation, PARA move
Stocks of all public sector banks (PSBs) tanked after Finance Minister Arun Jaitley in Economic Survey 2016-17 announced further need for privatising state-owned banks.
Nifty PSU index tumbled over 37 points or 1.16%, trading at 3,185.85.
Among the Nifty PSU Banks, Syndicate Bank was top loser trading at Rs 67.70 per share down by 2.17%, followed by Union Bank of India at Rs 145.60 per share below 1.92%, Bank of India at Rs 118.25 per share down 1.70%.
Other PSB losers were - Punjab Nation Bank (Rs 135.60 per share), IDBI Bank (Rs 77.65 per share), Oriental Bank (Rs 117.05 per share), Allahabad Bank (Rs 66.95 per share), State Bank of India (Rs 261 per share) and Bank of Baroda (Rs 166.05 per share) trading negative in the range of 0.80% - 1.50%.
Also, Andhra Bank (Rs 50.95 per share) and Canara Bank (Rs 287 per share) shares were down by 0.88% - 0.30% respectively.
The Survey said, "It highlights difficulties in privatizing public enterprises, even for firms where economists have made strong arguments that they belong in the private sector.”
As per the Survey, gross NPAs climbed to almost 12% of gross advances for public sector banks at end-September 2016.
To tackle the bad loans problem, the economic Survey 2016-17, has suggested creation of a centralised Public Sector Asset Rehabilitation Agency (PARA) that could take charge of the largest, most difficult cases, and make politically tough decisions to reduce debt.
Overall Nifty Bank index was trading at 19,562.15 on NSE, down by 23.10 points or 0.12%.
Some of private banks' stocks also tumbled - Federal Bank at Rs 76.50 down 1.23%, Kotak Mahindra Bank at Rs 770.05 below 0.72% and Axis Bank at Rs 470.25 down 0.35%.