Rs 1 lakh cr recapitalisation plan fails to impress markets as shares of Bank of Baroda, PNB, State Bank tank; IDBI gains

New Delhi: PSU bank stocks fell up to 6 percent a day after the government said it will infuse Rs 88,139 crore capital in 20 public sector banks (PSBs) before 31 March. Shares of Syndicate Bank tanked 5.82 percent, Punjab National Bank 5.73 percent, Bank of Baroda 4.80 percent, SBI 4.32 percent and Oriental Bank of Commerce shed 4.28 percent on BSE. On similar lines, Allahabad Bank fell 3.21 percent, Bank of India 2.43 percent and United Bank of India lost 0.27 percent. Meanwhile, IDBI Bank shares rose 1.07 percent on being allocated the highest capital infusion amount among PSBs. [caption id=“attachment_4319515” align=“alignleft” width=“380”] SBI is largest lender in country. Reuters.[/caption] The government on Wednesday said it will infuse an unprecedented Rs 88,139 crore capital in 20 public sector banks (PSBs) before 31 March to boost lending and revive growth. It unveiled steps to tackle the bad loan problem which has reached record levels. The lenders, which include State Bank of India, account for more than two-third of India’s banking assets as well as most of the over Rs 8 lakh crore of non-performing assets (NPAs) or bad loans. The capital infusion is part of the massive Rs 2.11 lakh crore bank recapitalisation plan announced by the government in October last year. It is spread over two financial years – 2017-18 and 2018-19. The finance ministry will raise Rs 80,000 crore through recapitalisation bonds, and provide another Rs 8,139 crore from the Budget to recapitalise the banks.