Indian Bank, PNB, other PSU bank stocks fall up to 6% after FinMin clarifies no proposal to hike FDI limit

PSU Bank stocks fall

The shares of PSU banks dropped in trade on December 3 after government clarified that it has no plans to raise foreign direct investment (FDI) limit in these lenders from 20 percent to 49 percent. This comes after the stocks recorded sharp gains following earlier reports.

The Nifty PSU Bank index was down more than 3 percent to 8,257.40, as seen at 11:30 am on Wednesday.

What government said:

Minister of State for Finance Pankaj Chaudhary denied reports on proposal to hike FDI limit in PSU banks in a written question in the Rajya Sabha.

Earlier in October, Reuters had reported that the Indian government is planning to allow direct foreign investment in state-run banks of up to 49 percent, more than double the current limits.

Nifty PSU Bank extends decline:

The Nifty PSU Bank index has extended decline for the second consecutive session. Yesterday's losses came after Minister of State for Finance Pankaj Chaudhary said in a written reply in the Lok Sabha that there is no proposal on merger or consolidation of state-owned banks before the government, denying reports.

Top losers on Nifty PSU index:

Indian Bank shares were the top losers on the Nifty PSU Bank index, falling more than 6 percent to trade at Rs 807.65 apiece. Punjab National Bank (PNB) shares meanwhile fell more than 4 percent.

Bank of India, Canara Bank and Bank of Baroda shares fell over 3 percent each, while Punjab & Sindh Bank (PSB), Central Bank of India, Union Bank of India and UCO Bank fell more than 2 percent each.

State Bank of India (SBI) shares fell nearly 2 percent, while Indian Overseas Bank (IOB) and Bank of Maharashtra shares were down more than 1 percent each.

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