Allahabad Bank's stock jumped 11%? Stock Market News.

What is the reason for the 11% jump in Allahabad Bank's stock?

New Delhi:
Allahabad Bank shares jumped up to 11 per cent on Friday. The reason for this is that this bank is going to get capital from the government in the current financial year. Allahabad Bank has said that it will get Rs 2,153 crore capital from the government in this financial year.

After this news came out, the bank's stock jumped 10.98 per cent. Its price reached Rs 19.70. However, at 11.50 in the morning, this fast decreased slightly. At that time, the share price was up 7.61 per cent at Rs 19.10.

In the information given to the market, this government bank has said that the Finance Services Department has informed through a letter that it has approved the proposal to issue fresh capital of Rs 2,153 crore. In the last nine months, there has been a big fall in the bank's stock price.

Allahabad Bank will allocate preferential shares to the Central Government in lieu of this capital. It will be offered as a government investment during the financial year 2019-20. Allahabad Bank will soon merge with Indian Bank.

This capital will help Allahabad Bank to increase its total capital. It will reach the mandatory limit for a merger with the big bank. On August 30, the government announced a grant of Rs 55,250 crore to several public sector banks. The name of Allahabad Bank was not included in this.

The central government is constantly emphasizing on increasing the capital base of public sector banks so that the growth of the economy can be increased. In August, Finance Minister Nirmala Sitharaman announced the merger of state-run banks, after which the number of state-run banks will be reduced from 27 to 12.

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