Business Standard

Banking shares dip post RBI policy

SBI, ICICI Bank, Union Bank of India and Canara Bank are trading lower by more than 2% each on the Bombay Stock Exchange.

SI Reporter  |  Mumbai 

Banking shares are under pressure after the Reserve Bank of India (RBI) kept repo rate and cash reserve ratio (CRR) unchanged in its mid-quarter monetary policy review today.

State Bank of India, ICICI Bank, Union Bank of India and Canara Bank are trading lower by more than 2% each on the Bombay Stock Exchange. 

The banking index Bankex, the largest loser among sectoral indices, is down almost 2% compared to less than 0.50% fall in benchmark Sensex at 1105 hours.

“On the basis of the current macroeconomic assessment, it has been decided to keep the CRR of scheduled banks unchanged at 4.25% their net demand and time liabilities (NDTL) and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0%,” RBI said in a release.

CRR is the proportion of total deposits a bank has to keep with RBI as cash. Most of the analyst expected the central bank will cut the CRR by 25 bps points.

“Overall, recent inflation patterns and projections provide a basis for reinforcing our October guidance about policy easing in the fourth quarter. However, risks to inflation remain and accordingly, even as the policy emphasis shifts towards growth, the policy stance will remain sensitive to these risks,” the central bank said.

Meanwhile, BofA Merrill Lynch expects the RBI to resume cutting rates only from January – 75 bps till July - once inflation peaks off to 7% levels in the March quarter. India is the only BRIC (Brazil, Russia, India and China) where lending rates are almost at their 2008 peak.

RECOMMENDED FOR YOU

Banking shares dip post RBI policy

SBI, ICICI Bank, Union Bank of India and Canara Bank are trading lower by more than 2% each on the Bombay Stock Exchange.

Banking shares are under pressure after the Reserve Bank of India (RBI) kept repo rate and cash reserve ratio (CRR) unchanged in its mid-quarter monetary policy review today.

Banking shares are under pressure after the Reserve Bank of India (RBI) kept repo rate and cash reserve ratio (CRR) unchanged in its mid-quarter monetary policy review today.

State Bank of India, ICICI Bank, Union Bank of India and Canara Bank are trading lower by more than 2% each on the Bombay Stock Exchange. 

The banking index Bankex, the largest loser among sectoral indices, is down almost 2% compared to less than 0.50% fall in benchmark Sensex at 1105 hours.

“On the basis of the current macroeconomic assessment, it has been decided to keep the CRR of scheduled banks unchanged at 4.25% their net demand and time liabilities (NDTL) and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0%,” RBI said in a release.

CRR is the proportion of total deposits a bank has to keep with RBI as cash. Most of the analyst expected the central bank will cut the CRR by 25 bps points.

“Overall, recent inflation patterns and projections provide a basis for reinforcing our October guidance about policy easing in the fourth quarter. However, risks to inflation remain and accordingly, even as the policy emphasis shifts towards growth, the policy stance will remain sensitive to these risks,” the central bank said.

Meanwhile, BofA Merrill Lynch expects the RBI to resume cutting rates only from January – 75 bps till July - once inflation peaks off to 7% levels in the March quarter. India is the only BRIC (Brazil, Russia, India and China) where lending rates are almost at their 2008 peak.

image

LIVE MARKET

BSE 25739.32

42.88 (0.17 %)

NSE 7796.10

10.25 (0.13%)

Widgets Magazine

STOCK WATCH

Company Price() Chg(%)
PMC Fincorp 1.48 4.23
Hathway Cable 43.10 4.23
DLF 109.95 3.73
Info Edg.(India) 771.00 3.37
Gati 144.20 3.00
> More on BSE Gainers
Company Price() Chg(%)
Esab India 572.95 4.17
DLF 110.00 3.97
Ess Dee Alumin. 274.30 3.69
K P R Mill Ltd 736.35 3.16
Gati 144.35 3.00
> More on NSE Gainers
Company Price() Chg(%)
Metalyst Forg. 48.45 -5.00
Sunrise Asian 200.80 -4.97
Castex Tech 54.65 -4.96
CCL Inter 46.00 -4.47
Cairn India 141.60 -2.85
> More on BSE Gainers
Company Price() Chg(%)
Rasoya Proteins 0.20 -20.00
Shrenuj & Co. 44.85 -4.98
Castex Tech 54.80 -4.94
Guj NRE Coke 2.95 -4.84
Usha Martin 14.70 -3.61
> More on NSE Gainers
Widgets Magazine
Widgets Magazine
Widgets Magazine

Derivatives

Index
Instrument Type
Expiry Date
Option Type
Strike Price