Shares of 4 public sector banks jump after capital infusion
Shares of four public sector banks -- Indian Overseas Bank, Central Bank of India, UCO Bank, and Bank of India -- on Thursday closed with up to 6.25 per cent gains after the government infused Rs 14,500 crore to improve their financial health.
Indian Overseas Bank closed 6.25 per cent higher, Central Bank of India gained 4.89 per cent, UCO Bank 3.91 per cent and Bank of India 2.95 per cent on the BSE.
These stocks had jumped up to 10 per cent during the morning trade.
The government has infused Rs 14,500 crore, mainly into banks that are under the RBI''s prompt corrective action framework to improve their financial health.
Indian Overseas Bank, Central Bank of India and UCO Bank are currently under this framework that puts several restrictions on them, including on lending, management compensation and directors'' fees.
Of the total infusion, Rs 11,500 crore has gone to these three banks while the remaining Rs 3,000 crore has been infused into Bank of India.
According to a government notification, Rs 4,800 crore has been provided to Central Bank of India, Rs 4,100 crore to Indian Overseas Bank and Kolkata-based UCO Bank has got Rs 2,600 crore.
The capital infusion will help these banks to come out of the Reserve Bank of India''s prompt corrective action framework.