The PSU Bank Index is trading near a 4-month high as of 11:08 am, with notable gains seen across several public sector banks:
- UCO Bank: ₹48.69 ▲ 7.89%
- Central Bank: ₹60.70 ▲ 7.02%
- IOB: ₹57.76 ▲ 6.08%
- PSB: ₹53.37 ▲ 4.65%
- Maha Bank: ₹58.36 ▲ 2.26%
- Bank of India: ₹116.58 ▲ 2.25%
- Canara Bank: ₹106.43 ▲ 1.25%
- Union Bank: ₹126.91 ▲ 0.67%
- Bank of Baroda: ₹256.17 ▲ 0.64%
- PNB: ₹108.52 ▲ 0.51%
- SBI: ₹854.80 ▲ 0.10%
Public sector banks are witnessing robust buying interest, driven by positive sentiment around improving asset quality, credit growth, and potential policy tailwinds. UCO Bank, Central Bank, and IOB led the rally with gains exceeding 6%.
Also –
Citi’s analysis suggests that the Reserve Bank of India (RBI) may consider a phased reduction of 25 basis points in the repo rate across consecutive policies, along with a potential Cash Reserve Ratio (CRR) cut. Key highlights include:
- Liquidity Impact: Durable liquidity in the system has reduced by over ₹2 trillion in one month due to significant forex operations by the RBI. A CRR reduction from 4.5% to 4% would normalize pre-COVID levels and release approximately ₹1 trillion of liquidity into the system.
- Beneficiaries:
- A CRR cut is expected to benefit HDFC Bank, Axis Bank, Federal Bank, and Bank of Baroda the most, given their higher reliance on this reserve.
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