Govt to infuse Rs 20,000 crore in PSBs via recap bonds; should you buy?

Analysts suggest that given weak balance sheets and low recap amount, outlook for the public sector banks continue to remain bleak

Shares of public sector banks including State Bank of India (SBI) and Canara Bank were largely trading higher on Tuesday on hopes that the government could infuse up to Rs 20,000 crore through recapitalisation of bonds by the fourth quarter of the current fiscal.

Individually, Indian Overseas Bank, Central Bank of India, Bank of Maharashtra gained 1.5 per cent each on the National Stock Exchange (NSE), followed by gains in Union Bank of India (1.4 per cent), and SBI and Canara Bank (1 per cent each).

On the downside, Indian Bank, Bank of Baroda, Bank of India, Punjab National Bank,