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Nifty, Sensex fall; bank stocks slip as RBI bans LoUs


By Krishna V Kurup

(Reuters) - Indian shares fell on Wednesday after a central banning issuance of letters of undertaking (LoU) by lenders hit while revelations by of additional exposure in an alleged fraud further dampened sentiment.

The (RBI) barred all lenders from issuing letters of undertaking (LoU) - a form of credit guarantee at the heart of a major fraud that shook the financial sector last month. The instruments are all forms of often used by importers to fund their overseas purchases.

told police on Tuesday that it had uncovered additional exposure of about 9.42 billion rupees ($144.83 mln) to Gitanjali group of companies, taking its overall exposure in connection with the fraud to well over the $2-billion mark.

The broader NSE dropped 0.48 percent to 10,376.35 as of 0545 GMT, while the benchmark BSE Sensex fell 0.45 percent to 33,705.14.

"The selling in stocks on rising delinquencies along with RBI's move to ban LoUs and a weak international market is weighing on domestic stocks," said Saurabh Jain, assistant vice of research at

"There is not much confidence in the market."

The PSU fell 2.2 percent, with declining 4.8 percent, while dropped 4.1 percent.

Bucking the broader trend, rose as much as 5.5 percent on reports that is set to launch an open offer to buy non-promoter shares of the company in the next few days.

Asian shares fell amid fears of rising U.S. protectionism as fired his and sought to impose hefty tariffs on Chinese imports. MSCI's broadest index of shares outside stumbled 0.71 percent.

(Reporting by Krishna V in Bengaluru; Editing by Sunil Nair)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 14 2018. 11:45 IST