Banking sector stocks have been witnessing a dream run on the stock exchanges for almost a year now.
The stock prices of major banks have received a boost on expectation of better performance following steps to reduce non-performing assets.
Stock prices of banks beginning May 2 have generally moved upwards since then. Allahabad Bank has surged from Rs 15.70 to Rs 18.40 between May 2 and July 23. It made its IPO at Rs 10 a few months ago.
Andhra Bank rose from Rs 30.25 to Rs 35.40, Bank of Punjab added Rs 7.85 to Rs 22.90 and Bank of Baroda climbed from 86.80 to Rs 128.15 during the same period.
Meanwhile, Bank of India jumped from Rs 43.55 to Rs 49.15 and Canara Bank edged up from Rs 91.90 to Rs 103.05. During this period, State Bank of India, the largest commercial bank, rose from Rs 296.25 to Rs 427.05.
Meanwhile, State Bank of Bikaner & Jaipur has jumped from Rs 583.00 on May 2 to Rs 939.80 on July 23. Among other state-run banks, Punjab National Bank has surged from Rs 121 to Rs 169 and State Bank of Travancore has rose from Rs 480.10 to Rs 866.80 during the same period.
The banking sector which has been shy of stepping up credit to agriculture sector over the years over and above the mandatory requirement now appear to be optimistic of greater offtake of credit from the farm sector.
Corporate farming is expected to emerge as the new buzz word for stepping up agriculture credit in the next few years.
