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Banking shares are under hammer with including State Bank of India (SBI), Punjab National Bank, Canara Bank and Bank of India as many as 13 banks currently trading at their 52-week lows after the Reserve Bank of India (RBI) has imposed some more measures to tighten liquidity to stabilize Indian rupee.
Allahabad Bank, Corporation Bank, Dena Bank, Federal Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab and Sind Bank, Union Bank of India and Untied Bank of India are quoting at their 52-week lows. Most of these banks are down 4-9% on the Bombay Stock Exchange (BSE).
Among the other banking stocks, YES Bank has tanked nearly 13% to Rs 383, while IndusInd Bank had dipped 8%, ING Vysya Bank and Axis Bank (down 6% each), Kotak Mahindra Bank and Development Credit Bank (down 5% each).
The BSE banking index Bankex, the largest loser among sectoral indices, was down nearly 5% or 588 points as compared to 1.2% or 243 points fall in benchmark Sensex at 1349 hours.
On Tuesday, the RBI has capped the total quantum of funds available under liquidity adjustment facility (LAF) to 0.5% (lowered from 1%) of individual bank’s net deposits and time liabilities (NDTL), which would be effective from July 24, 2013.
The earlier imposed cap on overall allocation of funds at Rs 75,000 crore under LAF stands withdrawn. It has also increased the requirement of minimum daily cash reserve ratio (CRR) maintenance to 99% from 70%, which would be effective from first day of fortnight beginning July 27, 2013.
Earlier, last week the RBI had raised the marginal standing facility (MSF) rate – the emergency liquidity facility used by banks - by 200bp to 10.25%, restricted borrowing under LAF up to Rs 75,000 crore (now withdrawn) and announced open market bond sales for Rs 12,000 crore (of which it raised only Rs 2,532 crore).
Allahabad Bank, Corporation Bank, Dena Bank, Federal Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab and Sind Bank, Union Bank of India and Untied Bank of India are quoting at their 52-week lows. Most of these banks are down 4-9% on the Bombay Stock Exchange (BSE).
Among the other banking stocks, YES Bank has tanked nearly 13% to Rs 383, while IndusInd Bank had dipped 8%, ING Vysya Bank and Axis Bank (down 6% each), Kotak Mahindra Bank and Development Credit Bank (down 5% each).
The BSE banking index Bankex, the largest loser among sectoral indices, was down nearly 5% or 588 points as compared to 1.2% or 243 points fall in benchmark Sensex at 1349 hours.
On Tuesday, the RBI has capped the total quantum of funds available under liquidity adjustment facility (LAF) to 0.5% (lowered from 1%) of individual bank’s net deposits and time liabilities (NDTL), which would be effective from July 24, 2013.
The earlier imposed cap on overall allocation of funds at Rs 75,000 crore under LAF stands withdrawn. It has also increased the requirement of minimum daily cash reserve ratio (CRR) maintenance to 99% from 70%, which would be effective from first day of fortnight beginning July 27, 2013.
Earlier, last week the RBI had raised the marginal standing facility (MSF) rate – the emergency liquidity facility used by banks - by 200bp to 10.25%, restricted borrowing under LAF up to Rs 75,000 crore (now withdrawn) and announced open market bond sales for Rs 12,000 crore (of which it raised only Rs 2,532 crore).
