Banking Stock Rose After Budget: Banking stocks have seen a sharp rise after the budget. There is a strong shopping in the banking sector on 2 February after Budget Day. On the Nifty, the bank index is showing a gain of 3.63 percent or 1200 points. At the same time, the PSU bank index has strengthened by more than 4 percent. All the stocks in the index including SBI, HDFC Bank, ICICI Bank are up. Experts are also positive about banking stocks after the budget and they believe that this sector will get a big boost from the budget. After all, what has the banking sector got in the budget, after which there is such a spurt in shares.
How fast in bank shares
SBI: 7.10
HDFC Bank: 5.97
Federal Bank: 4.53
Bandhan Bank: 4.32
Kotak Bank: 3.37
RBL Bank: 2.51
IDFC First Bank: 2.25
ICICI Bank: 2.13
Bank of Baroda: 1.89
PNB: 1.68
IndusInd Bank: 1.15
Axis Bank: 0.56
(Note: Bank shares have shown a rise till 2 pm on February 2.)
For these reasons, the boom
Recapitalization: The Finance Minister announced in the budget that capital of 20 thousand crores will be infused in public sector banks in the financial year 2021-22. This can prove to be a boost to public sector banks. Recapitalization is being done in banks for the last 5 years. This will make it easier for banks to give loans, which can see growth.
NPA concerns: The Finance Minister said that an asset management company will be formed regarding NPAs. He said that there is a need to take such measures, so that the books of accounts of the bank can be corrected.
Safe Deposit in Banks: Insurance limit of bank account holders has been increased from 1 lakh to 5 lakh. That is, if the bank defaults in any case, then the 5 lakh rupees of the investors will be completely safe. Earlier this limit was 1 lakh rupees. The move is expected to increase deposits in banks.
Emphasis on privatization: The Finance Minister has announced that apart from IDBI Bank, 2 public sector banks will be privatized soon. The government wants to improve the banking sector through privatization. Banking reform is at the top of the government’s agenda.
Bad Bank: In the budget, the Finance Minister has also announced the formation of a band bank. Through this bad bank, banks will be helped in battling bad loans. With the help of Bad Bank, it will also help to settle the drowned loan. Banks will be able to transfer their submerged debts to Bad Bank, where bankers will try to settle this trapped people.
Expert opinion
Gurpreet Sidana, Chief Operating Officer, Religare Broking, says that asset monetization, asset reconstruction setup has been talked about to manage stressed assets. This is a step to boost the banking sector. Aditya Narayan, Research Head, Institution Equities, Edelweiss Securities, says the budget has indicated signs of banking and financial sector problems. Apart from banking, the NBFC sector will also be strengthened by this budget.
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