Advertisement

HindustanTimes Fri,24 Oct 2014

Bank stocks under pressure; tank up to 9% on RBI measures

PTI  Mumbai, July 24, 2013
First Published: 11:59 IST(24/7/2013) | Last Updated: 12:04 IST(24/7/2013)

Bank stocks today took severe beatingin the stock market, falling as much as 9% in morning trade, after the RBI announced additional liquidity tightening measures to check rupee slide.

Advertisement

Yes Bank tanked 8.6%, while Bank of India slipped 7.61%, Canara Bank (6.39%), Axis Bank (6.13%), Kotak Mahindra Bank (5.56%). Among blue-chips, PNB tumbled 5.58%, while ICICI Bank was down 4.63%, SBI (3.81%) and HDFC Bank (3.26%).

Following the weakness in these stocks, the BSE banking index plunged 4.44% to 12,260.52 and was the top loser among the 13 sectoral indices.

With the rupee still continuing to be weak, the Reserve Bank yesterday announced additional liquidity tightening measures to contain excessive speculation and volatility in the foreign exchange market.

RBI has reduced the liquidity adjustment facility (LAF) for each bank from 1% of the total deposits to 0.5%, thus limiting the access to borrowed funds from the central bank. The limit will come into force with immediate effect and continue till further notice, the RBI has said. In another measure to suck out liquidity from the system, RBI has asked banks to maintain higher average CRR (cash reserve ratio) of 99% of the requirement on daily basis as against earlier 70%.

CRR is portion of deposits that banks are required to keep with RBI.


Advertisement
more from Business

Sensex begins Samvat 2071 on positive note, up 63 points

The first trading session of Samvat 2071 concluded on a positive note on Thursday with the Sensex rising over 63 points and the Nifty regaining the 8,000-mark, extending gains for the fifth straight session.
markets
Advertisement
Most Popular
Advertisement
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved