Banking shares in focus on the bourses trading higher by up to 10% after the Reserve Bank of India (RBI) has allowed banks to borrow overseas up to 100% of their capital and swap it at a subsidized rate.
Most of public sector banks such as Uco Bank, Dena Bank, Oriental Bank of Commerce, Syndicate Bank, Bank of India and Union Bank of India are up 5-10% on BSE. Andhra Bank, United Bank of India, Indian Overseas Bank, Allahabad Bank and Central Bank of India are up 4% each.
Under the new norms, RBI has allowed swap facility for term deposits in dollar denomination ranging from 1—3 years at a concessional rate of 1% below the market rate, RBI said in a notification.
Besides, it has relaxed norms for banks to borrow funds from overseas market, up to 100% of equity capital, with upper limit of $10 million.
The concessional swap window will remain open till November 30, 2013. To avail of this facility, RBI said banks need to maintain a minimum 12% CRAR and take clearance from their respective board.
Meanwhile, private sector banks like YES Bank, ICICI Bank, Kotak Mahindra Bank and HDFC Bank are trading lower by less than 2% on BSE at 1140 hours.
Most of public sector banks such as Uco Bank, Dena Bank, Oriental Bank of Commerce, Syndicate Bank, Bank of India and Union Bank of India are up 5-10% on BSE. Andhra Bank, United Bank of India, Indian Overseas Bank, Allahabad Bank and Central Bank of India are up 4% each.
Under the new norms, RBI has allowed swap facility for term deposits in dollar denomination ranging from 1—3 years at a concessional rate of 1% below the market rate, RBI said in a notification.
Besides, it has relaxed norms for banks to borrow funds from overseas market, up to 100% of equity capital, with upper limit of $10 million.
The concessional swap window will remain open till November 30, 2013. To avail of this facility, RBI said banks need to maintain a minimum 12% CRAR and take clearance from their respective board.
Meanwhile, private sector banks like YES Bank, ICICI Bank, Kotak Mahindra Bank and HDFC Bank are trading lower by less than 2% on BSE at 1140 hours.