Shares of PSU banks on Tuesday gained up to 8 per cent after the RBI came out with a scheme for resolution of bad loans of large projects wherein a portion of the debt will be converted into equity or other instruments. The scrip of Punjab National Bank surged 7.90 per cent and Bank of India gained 3.37 per cent on the BSE.
Shares of Allahabad Bank went up by 2.98 per cent, SBI rose by 2.65 per cent, Canara Bank (2.39 per cent), Indian Overseas Bank (2.13 per cent) and Bank of Baroda (1.99 per cent). “The latest restructuring scheme is yet another attempt to provide additional tool to corporate lenders to address the continuing NPA problem,” said Dhananjay Sinha, Head Institutional Research, Economist & Strategist, Emkay Global Financial Services.
RBI on Monday came out with a scheme for resolution of bad loans of large projects wherein a portion of the debt will be converted into equity or other instruments under supervision of IBA’s Overseeing Committee.