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HindustanTimes Wed,16 Apr 2014

Bank shares plunge after RBI unexpectedly hikes rates

Reuters   September 20, 2013
First Published: 12:46 IST(20/9/2013) | Last Updated: 12:50 IST(20/9/2013)

India's NSE bank index fell as much as 6.6 %after Reserve Bank of India Governor Raghuram Rajan surprised markets in his maiden policy review on Friday by raising interest rates to ward off rising inflation.

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Analysts tracking the sector say this is likely to hit growth further as RBI has chosen inflation over growth in its growth-inflation dynamics.

Among large caps, ICICI Bank Ltd shares fall 5.2 %while Axis Bank Ltd drops 6 %

Banks dependent on wholesale deposits also fall. Yes Bank Ltd plunges 9 %, while Indusind Bank Ltd is down 6.2 %.

In state-owned banks, State Bank of India Ltd falls 5.3 %, while Bank of Baroda Ltd is down 5.4 %.

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