After the government entrusted the market regulator to look into the volatile trend in public sector bank scrips, Securities and Exchange Board of India on Monday said it was looking into the matter and will come out with a report.

"We are looking into it (the volatile movement of public sector bank shares). We will come out with a report," Sebi chairman G N Bajpai told PTI after meeting new finance secretary D C Gupta.

However, he did not specify when Sebi would submit the report to the government.

Earlier, Finance Minister Jaswant Singh asked Sebi to study the trading pattern in these stocks and urgently submit a report.

"I am disappointed with what has happened with the banking stocks and have already asked Sebi chairman G N Bajpai to look into it and urgently report", Singh said.

Scrips of PSU banks have been witnessing volatility in the last few days, especially in those stocks where banks have announced their plans to return equity to the government.

Though there were reports that the government might attach premium while the banks return the equity, the Centre had clarified later that it had not firmed up any decision.

Government's clarification had come in the face of reports that the centre may ask banks to return equity at market value instead of the face value.

In 1994-95, PSU banks were provided additional capital by the government to enable them to meet the stringent prudential norms set by the Reserve bank of India, sources said.

Lately, many PSU banks have been returning a portion of government equity with the improvement in their financial performance including capital adequacy ratios, they added.

Bank of India, Canara ank and Andhra Bank are among those, which returned equity to the government while others like Punjab National Bank, Oriental Bank of Commerce, Indian Oveseas Bank and Bank of Baroda are planning to do so.

This was done in order to improve their earnings per share, especially by those banks opting to tap the capital market.

In recent months, prices of PSU banks soared to all time highs after they posted over 50 per cent growth in profit, improvement in CAR and reduction of NPAs.

Scrip prices of Bank of Baroda, Bank of India, State Bank of Travancore, State Bank of Mysore, Oriental Bank of Commerce and Punjab National Bank had witnessed heavy trading resulting in high price movements.