After opening the day flat, Share markets in India witnessed choppy trades and are presently trading below the dotted line. Sectoral indices are trading on a mixed note, with stocks in the auto sector and stocks in the realty sector witnessing maximum buying interest, while stocks in the metals sector are leading the losses.
The BSE Sensex is down up by 80 points (down 0.2%) and the NSE Nifty is trading down by 30 points (down 0.3%). Meanwhile, the BSE Mid Cap index is trading up by 0.1%, while the BSE Small Cap index is trading down by 0.1%. The rupee is trading at 65.37 to the US$.
In news from the banking sector. According to a leading financial daily, the government has sought a special dividend from the Reserve Bank of India (RBI) to fund a part of its Rs 2.1 trillion plan to recapitalize public sector banks (PSBs).
As per the article, the government asked the RBI if it can pay a special dividend apart from the yearly surplus that it already pays to the government.
Provided talks on the matter are fruitful, the dividend payout will be made during the current RBI financial year ending June 30, 2018. This dividend, if agreed to by the central bank, will be used only for bank recapitalization.
The RBI had for its financial year 2016-17 transferred Rs 306.6 billion of its surplus to the government, less than half of the Rs 658.8 billion it had handed over a year earlier, citing expenses of demonetisation and the subsequent printing of notes. The government had in the Budget for 2017-18 accounted for a dividend of Rs 74,901 crore from the RBI and nationalised banks.
According to various reports, the RBI may participate in the Rs 1.35-trillion bond programme that is a component of the bank recapitalization plan. The government plans issue the first tranche of the bank recapitalization bonds in December.
