May 14, 2014 / 5:43 AM / 3 years ago

State-run banks gain on RBI panel report

People walk in front of a signboard displayed at the head office of State Bank of India (SBI) in Mumbai February 14, 2014.Mansi Thapliyal/Files

Reuters Market Eye - State-run banks gain after a committee appointed by Reserve Bank of India proposed on Tuesday the Indian government should cut its stakes in state banks to below 50 percent.

State Bank of India is up 1.1 percent, Oriental Bank of Commerce (ORBC.NS) gains 4.2 percent, Punjab National Bank (PNBK.NS) is up 4.4 percent while Canara Bank (CNBK.NS) surges 7.3 percent.

"From a purely financial standpoint this is a favourable trade-off for the government, as a more competitive set of banks can be expected to improve the financial returns to the government," the committee chaired by former Axis Bank Chief Executive P. J. Nayak wrote.

Reporting by Abhishek Vishnoi

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