 "Banking shares mixed as RBI keeps rates unchanged")
Banking shares are trading mixed after the Reserve Bank of India (RBI) has kept key policy rates unchanged.
Axis Bank, Yes Bank, Bank of Baroda, Bank of India and Punjab National Bank from the Nifty Bank index are down less than 1%, while State Bank of India, IndusInd Bank, ICICI Bank and HDFC Bank are trading flat on the National Stock Exchange (NSE).
At 11:49 AM, Nifty Bank, a gauge of private and public sector banks, was down marginally by 0.05% at 17,421 as compared to 0.23% rise in the Nifty50 index.
Since September 30, the banking index had outperformed the market by 1.2% against a 0.17% decline in the benchmark index.
The RBI on Tuesday held its repo rate steady at 6.75%, having cut the policy rate by as much as 75 basis points in three tranches earlier this year. Repo, or repurchase, is the rate at which the central bank lends money to commercial banks.
The RBI will shortly finalise the methodology for determining the base rate based on the marginal cost of funds, which all banks will move to.
“Since the rate reduction cycle that commenced in January, less than half of the cumulative policy repo rate reduction of 125 bps has been transmitted by banks. The median base lending rate has declined only by 60 bps,” the RBI said in its fifth bi-monthly monetary policy statement, 2015-16.
Axis Bank, Yes Bank, Bank of Baroda, Bank of India and Punjab National Bank from the Nifty Bank index are down less than 1%, while State Bank of India, IndusInd Bank, ICICI Bank and HDFC Bank are trading flat on the National Stock Exchange (NSE).
At 11:49 AM, Nifty Bank, a gauge of private and public sector banks, was down marginally by 0.05% at 17,421 as compared to 0.23% rise in the Nifty50 index.
Since September 30, the banking index had outperformed the market by 1.2% against a 0.17% decline in the benchmark index.
The RBI on Tuesday held its repo rate steady at 6.75%, having cut the policy rate by as much as 75 basis points in three tranches earlier this year. Repo, or repurchase, is the rate at which the central bank lends money to commercial banks.
The RBI will shortly finalise the methodology for determining the base rate based on the marginal cost of funds, which all banks will move to.
“Since the rate reduction cycle that commenced in January, less than half of the cumulative policy repo rate reduction of 125 bps has been transmitted by banks. The median base lending rate has declined only by 60 bps,” the RBI said in its fifth bi-monthly monetary policy statement, 2015-16.