Shares of Corporation Bank tanked 9.28 per cent to Rs 17.10, Punjab National Bank plunged 8.54 per cent to Rs 59.40.
Bank of Baroda will get Rs 7,000 crore, Indian Overseas Bank Rs 3,800 crore and Central Bank of India Rs 3,300 crore.
The move will also lead to cheaper working capital loans for industry.
The government has set fiscal deficit target of 3.3 per cent of the GDP for the current fiscal.
FM Sitharaman also assured that working capital loans for the industry will become cheaper.
The campaign comes at a time when the economy is facing headwind and it has slowed to a 5-year low of 6.8 per cent.
Capital infusion has not been sufficient and a delay in addressing banking issues could prolong India’s economic recovery.
The country's largest bank, State Bank of India, has lending worth Rs 1.76 lakh crore classified as NPA till march 2019.
Govt has instituted a comprehensive 4R's strategy for recognition of non-performing assets (NPAs) transparently.
The NBFC sector is currently undergoing a liquidity hurdle with a spate of defaults of companies.