Bank stocks surge as FM promises solution to bad loans

Shares of public sector banks rose by up to 4.5 per cent on Friday after Finance Minister Arun Jaitley promised a solution to the growing NPA problem within next few days.

The scrip of Bank of India rose by 4.5 per cent, Bank of Baroda surged 4.16 per cent, Union Bank of India (3.18 per cent), PNB (3 per cent) and SBI (2.49 per cent) on BSE.

Buying was also seen in private lenders, with ICICI Bank trading 3.03 per cent higher and AXIS Bank 0.83 per cent up. Promising a solution to the growing NPA problem in the next few days, Finance Minister Arun Jaitley yesterday said the resolution being worked out with the RBI will put enough pressure on borrowers to settle dues.

He blamed the bad loans of public sector banks on just 30-50 companies, saying accounts of these will have to be fixed to solve the issue.

The gross NPAs of public sector banks have risen to Rs 6.06 lakh crore in December 2016, from Rs 5.02 lakh crore at the end of March 2016.