Canara Bank, Punjab National Bank, Bank of Baroda, and Indian Bank Share Price Rise After ECLGS 5.0 Boost

Shares of public sector banks moved higher in Wednesday’s intra-day trade, with many stocks rising up to 3%. The PSU Bank index also outperformed the broader market after a recent period of underperformance.

Banks such as Canara Bank, Punjab National Bank, Bank of Baroda, Indian Bank, UCO Bank and Union Bank of India rose around 2–3%, while State Bank of India and a few others saw smaller gains.

Government Approves ECLGS 5.0

The main reason behind the rally is the government’s approval of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. The scheme aims to support businesses facing liquidity pressure due to the ongoing West Asia crisis.

The government has allocated ₹18,100 crore under this programme. It is expected to help banks provide additional loans worth ₹2.55 trillion to businesses.

Support For MSMEs And Airlines

Under the new scheme:

• MSMEs can take additional loans up to 20% of their peak working capital usage (maximum ₹100 crore) with 100% government guarantee.
• Airlines can borrow up to ₹1,500 crore with 90% government guarantee.
• Most sectors will get a 5-year loan with a 1-year moratorium.
• Airlines will get a 7-year loan with a 2-year moratorium.

This government guarantee reduces lending risk for banks and encourages more loan disbursement.

About PSU Stocks

PSU (Public Sector Undertaking) stocks are companies in which the Indian government owns more than 50% stake. These companies are generally known for stability, steady dividends, and strong presence in sectors like energy, banking, and infrastructure. The PSU space continues to benefit from government capital expenditure and policy support.

Some of the leading PSU stocks by market size and activity in 2026 include State Bank of India (SBI), Oil and Natural Gas Corporation (ONGC), Coal India Ltd, NTPC Ltd, and Bharat Electronics Ltd. Other key players include Power Grid Corporation of India, Indian Oil Corporation, Bharat Petroleum Corporation Ltd, Indian Railway Finance Corporation, and Bank of Baroda. These companies play a major role in supporting India’s economic growth and infrastructure development.

Conclusion

The ECLGS 5.0 scheme is expected to support loan growth and reduce risk for PSU banks. This positive outlook helped lift PSU bank stocks in the market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.