PSU Bank stocks like IOB, Central Bank gain as much as 11% - Here's why

Prime Minister Narendra Modi spoke about state-run lenders in the Lok Sabha on Thursday, saying that PSU Banks have doubled their net profit recently.

"We have corrected the NPA situation and stopped the evergreening of loans. We have realised that the banking sector needs to be healthy and we have taken lots of steps," Finance Minister Nirmala Sitharaman also spoke about the state-run lenders in the Lok Sabha on Thursday.

The minister further said that PSU Banks have had record profits of Rs 1 lakh crore with Gross and Net NPAs being at the lowest level in nearly a decade. "Bank dividends are used for public good," the minister said.

"I am of the camp that believes that some of these PSU banks offer you great secular long-term opportunities, which you cannot equate or measure with on a core QoQ basis," Market Expert Prakash Diwan said.

"Bank of Baroda (BoB), of course, had some issues related to CASA and a little bit of softness, I think that also could change. But I'm of the belief that the likes of State Bank of India (SBI) will do far better than some of the other PSU banks, given its size, given its footprint," he added.

The PSU Bank index is currently trading 2 percent higher and all 12 constituents of the index are trading with gains.