India's public sector banks rally after RBI's new forex swap facility

Bank of Baroda

09/06/2026 09:16

** Shares of Indian PSU banks up between 2% and 5.3%
** Top lender SBI SBI.NS up 2%, heavyweights Bank of Baroda BOB.NS and Punjab National Bank PNBK.NS climb 5.3% and 3.8%, respectively
** Nifty PSU .NIFTYPSU index climbs 3.1%
** India's RBI introduces subsidized forex swap facility for banks' overseas foreign currency borrowings with minimum three-year maturity
** Central bank move reduces funding costs and improves liquidity for both state-owned and private lenders
** Borrowing limits tied to unimpaired Tier-1 capital could allow larger banks to potentially raise more funds
** PSU banks particularly benefit due to their substantial Tier-1 capital bases
** YTD Nifty PSU index down 0.9%
     
     

 (Reporting by Mridula Kumar in Bengaluru)
 ((Mridula.Kumar@thomsonreuters.com;))