The Nifty Bank index touched record highs in early trading after the Finance Minister Nirmala Sitharaman announced the divestment of two public sector undertaking (PSU) banks in FY22 and proposed a bad bank to house loans gone sour. The Nifty Bank index surged over 4 per cent to touch a record high of 34,653 in early trading and at 10:45 am, the Nifty Bank index was trading at 33,863.95, up 785 points or 2.3 per cent. Among individual financial stocks, HDFC Bank, HDFC, Bajaj Finance and Kotak Mahindra Bank gained 2.3 per cent to 5.3 per cent.
Finance Minister Nirmala Sitharaman announced setting up an asset reconstruction company (ARC) and an asset management company (AMC) to house toxic assets denting bank books.
The government has also decided to infuse Rs 20,000 crore into public sector banks as part of its recapitalisation plans.
The BSE Sensex was trading at 49,443.95 points, higher by 828.50 points or 1.69 per cent and the NSE Nifty was at 14,516.60,up 233.95 points or 0.65 points at the time.