PSBs lose Rs 1 trn; PNB scam erodes investor interest spurred by recap plan

Over the last five months, it seemed like the Nifty PSU (public sector undertaking) Bank Index was gaining, with increased investor interest on account of the government's recapitalisation plan.

However, after the Punjab National Bank (PNB) scam, the indication of possible system-wide fraud has caused the index to fall 22 per cent from its January high, erasing Rs 1 trillion in value.

The government’s recapitalisation plan, announced on October 24, raised the PSU Bank Index to a high of Rs 3,965.60 by January 24. After which, it was stable for a while, each trading session’s closing price being lower than