Shares of public sector bank rose up to 3 per cent after Finance Minister Nirmala Sitharaman, in her Budget 2021 speech, proposed divestment and bank recapitalisation plan to boost banking sector. Shares of central Bank of India rose over 5 per cent, followed by SBI, Bank of Baroda, Canara Bank, among others. The Nifty PSU Bank index was up about 3 per cent.
In her Budget speech, the FM announced strategic divestment in two public PSU banks and one insurance company, in the next fiscal year. She added that the legislation required for disinvestment in the PSBs will be brought in the ongoing Budget session of the Parliament. She also announced further capital infusion of Rs 20,000 crore for state-owned banks.
FM Sitharaman also announced that asset reconstruction and management company will be set up for stressed assets of banks.
She proposed disinvestment receipts at Rs 1.75 lakh crore for fiscal year beginning April 1, 2021.