New Delhi: PSU bank stocks declined on Monday after the Reserve Bank proposed tighter rules to govern lending to projects under implementation.
Shares of Punjab National Bank (PNB) tumbled 6.41 per cent, Canara Bank plunged 5.42 per cent, Bank of Baroda tanked 3.71 per cent and Union Bank of India declined 3.12 per cent on the BSE.
The stock of State Bank of India dropped 2.86 per cent and Bank of India dipped 2.57 per cent.
Also, Power Finance Corporation plummeted 8.93 per cent and REC dropped 7.35 per cent. The RBI on Friday proposed tighter rules to govern lending to projects under implementation.
The draft rules include a classification of the projects as per their phase and higher provisioning of up to 5 per cent during the construction phase, even if the asset is standard. In the last credit cycle, project loans were seen to have led to a build-up of stress on bank books. The standard asset provisioning otherwise stands at 0.40 per cent.