New Delhi, Sept 24 (UNI) The Associated Chamber of Commerce and Industry (ASSOCHAM) has said that with stock market trading at robust levels, notwithstanding the week-end crash, the public sector banks are losing a huge opportunity to raise fresh money from the market to re-capitalise their balance sheets, without depending on the government, and restore their normal credit operations which have come to a complete naught. “Several banks have government holding well above 52 per cent, the threshold set for the PSUs; thus they have ample scope to raise fresh capital. Banks like State Bank of India, Canara Bank, Punjab National Bank, Bank of Baroda should immediately file papers with the SEBI and announce follow on offers," the chamber said. It said, let the PSU banks not be bogged down by their lower valuations as compared to the peers in the private sector banks, because the latter operate in a different eco-system. "In any case, the valuation game is relative. If the SBI is trading at Rs 260-265 with the NIFTY around plus or minus 10,000, there is no guarantee the headline indices would not come down further. The market may correct further, once the foreign flows of money stops and the mutual funds find it difficult to sustain the momentum; by which time the opportunity would have gone," said ASSOCHAM Secretary General D S Rawat. The chamber said, the current state of the capital market may be marked by over-valuation and the recent rally may not have been supported by the corporate earnings, but "it is an opportunity not to be lost sight of. In fact, it is now being used by the IPO market. The key question is what makes public sector banks shy away from raising funds from the market. They cannot wait for the government to re-capitalise them and then turn into a positive cycle. Given the growth constraints, the government at this point of time has limited options and cannot give too much of money beyond what has been budgeted for. It is up to the banks to rise up to the challenge, of course with a nudge from the government". Different estimates suggest the PSU banks may well need over Rs 1,20 lakh crore by way re-capitalisation, whereas the budget can give them a measely Rs 10,000 crore, for improving their lending. The credit growth, as per the latest RBI data, by the state-owned lenders is just about zero, while stressed assets has crossed 14 per cent of their lending and the gross non-performing assets are well above 12 per cent. "The situation is precarious and any stimulus plan that the government may be working on, must include restoring the public sector banks to health," the ASSOCHAM said. UNI ADP AKC SHK 1600