PSU banks trade mixed ahead of RBI board meet outcome

Nifty PSU Bank index, the largest loser among sectoral indices, was down 0.82% at 12:07 PM; after gaining 5% in past four trading days on the NSE till Friday.

Shares of public sector banks (PSBs) were trading on a mixed note ahead of the Reserve Bank of India (RBI) board meeting today.

Bank of Maharashtra, Syndicate Bank, Vijaya Bank and Central Bank of India were up 2% each, while Dena Bank, Andhra Bank, Bank of Baroda, Corporation Bank, Indian Overseas Bank and Allahabad Bank were up 1% each.

However, State Bank of India, Oriental Bank of Commerce, Bank of India, Union Bank of India and Canara Bank were down in the range of 1% to 3% on the NSE.

At 12:07 PM; Nifty PSU Bank index, the largest loser among sectoral indices, was down 0.82%, as compared to 0.26% rise in the Nifty 50 index. In the past four trading days, the PSU bank index had gained 5%, against 0.94% rise in the benchmark index.

Over the past few days, the government and the RBI have had discussions in a bid to arrive at a common ground on at least two demands of the government — easing prompt corrective action framework (PCA) norms for some banks along with aligning the regulatory capital requirement of banks with international norms and a special dispensation for micro, small and medium enterprises (MSMEs).

According to Business Standard report, the RBI may agree to bring some PSBs out of the PCA, but it is not likely to accede to the government’s demand to set up a special refinance window for non-banking financial companies (NBFCs) at the board meeting of the central bank on Monday.

Some banks may be brought out of the PCA framework, an early warning tool used by the RBI, if the government agrees to the central bank’s terms related to fulfilling their capital needs, added reported quoting sources. CLICK HERE TO READ FULL REPORT

According to CARE Ratings, the NPA ratio of PCA banks has increased from 16.0% in March 2017 to 20.5% in March 2018 and is marginally up now to 21.0% in September.

“Given the restrictions on further lending it may be conjectured that this increase has been due to the recognition process. It is still uncertain whether the NPA levels have peaked or whether there could be new additions in the coming months. The absolute levels are lower in Q1 and Q2 compared with Q4 of last year but due to shrinking of the size of the loan book has increased as a ratio,” the rating agency said in a report.

State-owned banks currently under PCA are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

	1-year high		1-year low
Bank	Date	Price	Date	Price	Price*	% gain#
Oriental Bank	25/01/2018	136.35	09/10/2018	58.00	91.75	58.2
I O B	05/01/2018	25.40	08/10/2018	10.85	15.00	38.2
Union Bank (I)	17/11/2017	181.00	26/10/2018	61.25	82.60	34.9
Corporation Bank	24/11/2017	44.60	08/10/2018	20.90	27.75	32.8
Allahabad Bank	17/11/2017	82.00	09/10/2018	33.15	43.35	30.8
IDBI Bank	05/03/2018	91.50	05/07/2018	47.00	60.90	29.6
Canara Bank	21/11/2017	401.70	23/10/2018	204.75	263.70	28.8
UCO Bank	25/01/2018	36.65	08/10/2018	15.25	19.40	27.2
Bank of Maha	28/11/2017	28.80	11/10/2018	10.70	13.60	27.1
United Bank (I)	29/12/2017	19.50	08/10/2018	8.90	11.30	27.0
Bank of Baroda	17/11/2017	191.85	11/10/2018	91.00	115.20	26.6
Punjab Natl.Bank	17/11/2017	200.90	28/09/2018	58.45	73.20	25.2
St Bk of India	17/11/2017	346.70	23/03/2018	232.35	290.90	25.2
Dena Bank	25/01/2018	27.85	17/07/2018	13.70	16.55	20.8
Syndicate Bank	27/11/2017	95.90	09/10/2018	29.50	35.60	20.7
Bank of India	17/11/2017	216.80	25/10/2018	73.20	88.15	20.4
Pun. & Sind Bank	24/11/2017	51.45	01/10/2018	25.00	29.75	19.0
Andhra Bank	17/11/2017	67.55	29/10/2018	25.25	28.80	14.1
Central Bank	17/11/2017	94.00	11/10/2018	27.45	31.10	13.3
Indian Bank	17/11/2017	427.40	24/10/2018	210.40	229.15	8.9
Vijaya Bank	24/11/2017	76.60	22/10/2018	39.95	43.30	8.4
*Price on NSE in Rs as on November 16, 2018               # % change over  52-week low price
Source: CapitalinePlus