PSU banks rally on recap plans; add Rs 1.1 lakh cr to m-cap, PNB gains most

A day after Centre announced Rs 2.11 lakh cr recapitalisation plan, country's 21 listed state-run lenders added a combined Rs 1.12 lakh crore to their market value.

Punjab National Bank added Rs 13,590 crore to hit Rs 43,000 crore in market value, a 46.2% gain, the most in percentage terms.

RBI Governor Urjit Patel said in a statement that banks can use the capital for "immediate credit creation" and those that have "better addressed their balance sheet issues" could be given priority.

Credit Suisse raised state-run lenders to "a strong overweight position" from "underweight".

Morgan Stanley said the recapitalisation move