Shares of public sector banks rose by up to as much as 3 per cent today after Finance Minister Arun Jaitley said lenders will be empowered and protected in the case of "commercially prudent" settlement of bad debt.
The stocks of Oriental Bank of Commerce went up 2.85 per cent, Union Bank of India 2.52 per cent, Bank of Baroda 1.96 per cent and Andhra Bank 1.56 per cent on BSE.
Among others, Allahabad Bank gained 1.38 per cent, State Bank of India (1.30 per cent), Punjab National Bank (1.12 per cent) and IDBI Bank (1.09 per cent).
With provisioning for NPAs or bad debt leading to Rs 18,000 crore of accumulated net loss for about a dozen banks, he said the government will not hesitate to provide capital beyond the Rs 25,000 crore budgeted for the current fiscal.
After meeting top executives of state-owned banks, Jaitley said the Indian Banks' Association - a representative body of management of banking in India - will discuss and suggest a mechanism to handle settlements of non-performing assets (NPAs) or bad loans.
