Know how PSU Banks braved market concerns!

Shares of PSU Banks rallied further in afternoon trade on Friday after the government sought parliamentary nod to recapitalise some of these lenders in a bid to restart credit deployment and partially offset the sector's surging problem of non-performing assets.

Finance Minister Arun Jaitley requested for `12,010 crores from the government's coffers to put in more equity capital into lenders such as Canara Bank, Oriental Bank of Commerce, Andhra Bank and Dena Bank to mention a few.

As a consequence, the entire PSU Banking basket rallied to its day's high on the National Stock Exchange, led by State Bank of India, which jumped 4.3 percent to 267.80 rupees. Union Bank added 3.3 percent to 169.40 rupees. Canara Bank rose 2.4 percent to 270 rupees. Punjab National Bank added 0.7 percent to 151 rupees. Bank of Baroda rose 3.1 percent to 169.70 and Syndicate Bank jumped 2.8 percent to 95.25 rupees.

Modest gains were seen on Dena Bank, Bank of India and Andhra Bank as well.

PSU Banks have borne the brunt of the economic slowdown in the country with many companies in the steel, infrastructure, metals and commoditized sectors unable to pay off loans owing to slack demand for their products.

As a result, the non performing assets of such banks have soared because companies have sought help in either restructuring the tenure and the rate of interest on such loans.

Banks' earnings have been tepid and some lenders have seen their share prices erode sharply because of deepening non performing assets.

(Image credits: Indiatimes)