Recpaitalising banks through taxpayers' money will not solve the NPA problem.
Though most experts remain bullish on the banking space, they suggest investors buy only those banks whose NPAs are at a manageable level of 3% to 4% and there is credit growth or earnings visibility.
Top gainers in the Sensex pack included Tata Steel, Kotak Bank, NTPC, HDFC twins, PowerGrid and ONGC, rising up to 4.60 per cent.
Moody's said the asset quality of the banks will remain under pressure.
Among Sensex components, shares of Reliance Industries, India's largest company by market value, stole the show by surging 1.61 per cent to their highest in over three months.
Bank loan defaults rose to Rs 74,685 crore (Rs 746.85 billion) at the end of March 2010, with non-performing assets of public sector banks reaching Rs 57,301 crore (Rs 573.01 billion), Parliament was informed on Tuesday.
rediffGURU Rohit Gupta, co-founder and COO of College Vidya, provides a list of competitive exams that can help you land a job in the public sector.
Most of the buses run by Telangana State Road Transport Organisation are also off the roads
Analysts, however, said the timing of the infusion was good.
Bharti Airtel was the top gainer in the Sensex pack, rising around 4 per cent, followed by Tech Mahindra, HDFC, Kotak Bank, M&M and HCL Tech. NSE Nifty advanced 21.85 points to 16,280.10.
On the Sensex chart, IndusInd Bank, SBI, Dr Reddy's, NTPC, ICICI Bank, HCL Tech and Bajaj FinServ emerged as major laggards.
Many PSU banks had recently cut interest rate on loans for two-wheelers and consumer durables.
Indian stock markets are expected to be driven mostly by global factors this week amid a lack of local triggers and earnings season largely coming to an end, say analysts. Crude oil prices, rupee movement and US Federal Reserve meeting minutes to be released this week will also influence the market sentiment. "With the earnings season behind us, global cues would largely dictate the trend in the coming week," Ajit Mishra, SVP - technical research, Religare Broking Ltd, said.
Credit-to-deposit (CD) ratio of major public sector and private sector banks during the October-December quarter of FY24 inched up as compared to the previous quarter though government-owned lenders reported a lower rate than their private peers. CD ratio is the ratio of the funds that banks lend as compared to the funds raised in the form of deposits. The CD ratio of top public sector banks (PSBs) - State Bank of India, Punjab National Bank, Bank of Baroda and Canara Bank - was lower than their private counterparts.
Despite multiple headwinds at the start of 2023, the Indian markets delivered a strong performance, posting 19-20 per cent growth for the year. Even as new records were set, investor sentiment remains strong going into 2024, given the lower inflation, expectations of steady to lower interest rates, higher economic growth, and strong inflows. However, the overriding concern for most brokerages is valuations.
Bad loans of PSU banks rose by 28.5 per cent.
The Budget proposals are expected to boost the fortunes of consumer goods and fast-moving consumer goods companies, which have been struggling with poor consumer demand for more than a year. The Budget announcements, such as the increase in standard deduction by Rs 25,000 for income-tax payers and slab revisions, will put more money in their hands, boosting consumer demand. Private consumption is also likely to benefit from a new scheme to offer internships to 10 million youths in the country's top 500 companies.
Stock exchanges' levy of penalties, ranging from Rs 3 lakh to Rs 12 lakh, on public-sector undertakings (PSUs) for lapses in board composition for the 2024-25 October-December quarter has brought forth issues of governance. Last month, 16 PSUs requested bourses to waive these penalties, arguing that these lapses were neither due to negligence nor within their control, as the appointment of directors is managed by the government.
Bank of Baroda Q4 results: Key brokerages have raised their target prices on Bank of Baroda after the state-owned lender posted better-than-expected March quarter (Q4FY23) results. Analysts now see up to 29 per cent upside in the stock from a one-year perspective as they believe BoB is well-placed among the large public banks with nearly all key business metrics moving closer to the top-tier banks. Valuations, too, remain attractive despite steady strong quarterly performances.
The conciliation talks between UFBU and Indian Banks Association held in Mumbai moved a step ahead positively after the IBA offered a 9.5 per cent hike on pay slip cost and hold another round of talks on January 27, UFBU national Convenor M V Murali told PTI in Tirupati over phone.
The other prominent gainers were Tech Mahindra, HCL Technologies, Wipro, State Bank of India and Larsen & Toubro. Bajaj Finserv, Power Grid, UltraTech Cement and HDFC Bank were among the laggards.
'The Election Commission is conducting the National Register of Citizens in Bihar through the backdoor.'
A local official confirmed the incidents but said the causes of these suicides were yet to be ascertained.
Non-Performing Assets are a wake-up call for public sector banks.
Let all the stakeholders, especially the government, remember that if the Make in India lion needs to roar and rise again, it won't happen unless India Inc rises too, points out Shekaar Subramanian.
The 30-share BSE gauge climbed 465.14 points or 0.80 per cent to finish at 58,853.07. During the day, it jumped 546.97 points or 0.93 per cent to 58,934.90.
A number of non-banking financial companies (NBFCs) have tapped into the debt capital market ahead of the festival season to meet increasing credit demand as bank funding slows. On Tuesday, Aptus Value Housing Finance secured Rs 300 crore at an interest rate of 8.75 per cent through bonds maturing in five years. ICICI Home Finance Company turned to the market to raise Rs 275 crore at 7.94 per cent, alongside another Rs 300 crore at 7.95 per cent, through bonds maturing in five and three years, respectively.
Govt's divestment plans encourage funds to bet big on state-owned firms.
Wage revision in PSU banks is done every five years.
Fitch Ratings on Monday said the plan to privatise two state-owned banks in the current financial year ending March 2022 could face delays amid renewed challenges for the Indian banking sector due to the second wave of Covid-19. The government in the Budget announced plans to privatise two public-sector banks. NITI Aayog has been entrusted with the task of selecting the banks and one general insurance company for the privatisation.
Jaitley said that the banks have to play an important role in achieving the higher growth rate.
Private sector banks are way behind their PSU peers when it comes to opening financial inclusion accounts under the Prime Minister's Jan Dhan Yojana
His statement assumes significance in the light of scams in the state-owned banks.
The Sensex jumped nearly 900 points and the Nifty rallied over 272 points on Friday, bouncing back from the previous day's fall, following a positive trend in global equities and fresh foreign fund inflows. The BSE Sensex rallied 899.62 points or 1.53 per cent to end at 59,808.97 after starting the trade on a positive note. During the day, it jumped 1,057.69 points or 1.79 per cent to 59,967.04.
The S&P BSE Sensex and the Nifty50 have hit record highs amid the poll outcome-triggered bull frenzy at the bourses. Most analysts feel that the indices are on course to rise further over the next few months - till the general elections - albeit amid intermittent corrections - largely triggered by global developments. Bharatiya Janata Party's (BJP's) win in the three state elections of Madhya Pradesh (MP), Rajasthan and Chhattisgarh, analysts at Jefferies believe, reinforces the consensus expectations of a Modi win 2024 national elections with a greater likelihood of over 300 seats for the BJP.
In an eventful week ahead, stock market investors will take cues from major events like the US Federal Reserve's interest rate decision, the upcoming Union Budget and Q3 earnings, analysts said.
BSE PSU index rallies 10% in one month; nearly a third of the stocks on the index has gained 20% over the period
Reserve Bank has lowered interest rates by 0.50 per cent since January 2015.
Last year, the government had announced to infuse Rs 70,000 crore in PSU banks.
"Cost of funds is still high, so once it comes down, we will reduce interest rates," HDFC chairman Deepak Parekh said. Parekh's comments came two days after Finance Minister P Chidambaram said 'competition from PSU banks will force lenders in private sector to cut interest rates sooner than later'.
