Banking stocks take a hit on provisioning worries

Provisioning towards bad loans may remain elevated for corporate banks, PSBs in FY18

The Reserve Bank of India’s (RBI’s) mandate instructing banks to make higher provisions for accounts referred to the National Company Law Tribunal (NCLT) for resolution under the Insolvency and Bankruptcy Code (IBC) came as a jolt for banking stocks on Tuesday. While the overall trading condition was also weak, the news was particularly negative for public sector banks (PSBs). Syndicate Bank, Punjab National Bank, Canara Bank and Andhra Bank took 4-5 per cent hits in their stock prices, while that of State Bank of India, Bank of Baroda, and Union Bank corrected by 2.8-3.7 per cent on Tuesday. Even private