Banking stocks plummet on farm loan waiver

Banking stocks started sliding on Friday as soon as a proposal to waive farm loans was announced by Finance Minister P Chidambaram while presenting the national budget.

The Finance Minister presented the budget for 2008-09 in the Lok Sabha.

Chidambaram said the government would write off farm loans on landholdings of up to 2 hectares.

The Bankex index on the Bombay Stock Exchange plummeted 261.18 points or 2.59 per cent. All the 18 banking scrips in the index were trading in the red.

Bankex opened at 10,021.76 points and was trading at 9,812 points at noon.