Banking shares jumped as the government has sought Parliament approval for Rs 80,000 crore ($12.62 bln) extra spending to recapitalise state banks. Nifty PSU bank index gained as much as 2.9 per cent in its biggest intraday percentage gain since December 18.
State Bank of India rose 2 per cent and was among the biggest drivers of the NSE index, which was 0.32 per cent higher. IDBI Bank rallied 8.7 per cent, Bank of India jumped 4.6 per cent, and Punjab National Bank jumped 4.4 per cent.
The Union Government on Thursday sought Parliament approval for Rs 80,000 crore ($12.62 billion) extra spending to recapitalise state banks as part of a move to help lenders deal with bad debts and revive credit growth.
Last October, Finance Minister Arun Jaitley had announced the plan to recapitalise banks with Rs 2.11 lakh crore over two years, including Rs 1.35 lakh crore through recapitalisation bonds and Rs 58,000 crore from share sale by state-run banks.