Banks respond positively to Indian central bank’s COVID stimulus package – check out the list of top gainers

• Reserve Bank of India’s (RBI) governor Shaktikanta Das today announced another round of COVID stimulus package worth ₹50,000 crore.
  
• Indian banks – public, private as well as small finance banks – have responded positively to the announcement.
  
• Here’s a look at the top gainers among banks and small finance banks.

India’s largest public and private sector banks have responded positively to the Reserve Bank of India’s (RBI) COVID stimulus package worth ₹50,000 crore.

As part of the stimulus package, RBI has allowed banks to lend money to hospitals, manufacturers, importers and sellers of vaccines, oxygen concentrators, medical oxygen and COVID drugs.

The banking sector – apart from the broader market – has responded positively to RBI’s stimulus package announcement.

The Bank Nifty index comprising the most liquid and largest Indian banks dropped marginally by 0.2% immediately when RBI governor Shaktikanta Das began his speech.

However, since then, the index recovered to trade 1% above its previous close of 32,270.

Here’s how the top 5 private and public banks have responded to the announcement:

Source: NSE, May 5, 2021

Amongst small finance banks, Ujjivan has been the biggest gainer with a 3.3% uptick in its share price:

Source: NSE, May 5, 2021

Some of the highlights of RBI’s announcement are:

• Banks can now create a separate COVID-19 loan book, and money borrowed from RBI for this purpose will be lent at 3.75%, instead of the current repo rate of 4%.
  
• Small finance banks can opt for additional funds of up to ₹10,000 crore to lend up to ₹10 lakh to each borrower.
  
• Micro, small and medium enterprises who have loans outstanding up to ₹25 crore can get them restructured.
  

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