Bank Nifty surges 9% on RBI measures

YES Bank, Axis Bank, IndusInd Bank, Kotak Mahindra Bank and ICICI Bank have rallied more than 8% each on BSE.

Banking shares on a roll on the bourses in morning deals after the Reserve Bank of India (RBI) announced a slew of measures to benefit retail investors and revive the Indian economy.

YES Bank, Axis Bank, IndusInd Bank, Kotak Mahindra Bank and ICICI Bank have rallied more than 8% each, while HDFC Bank, Bank of Baroda, Federal Bank, Bank of India, Punjab National Bank and Union Bank of India are up 5-7% on the BSE.

The BSE banking index Bankex, and NSE Bank Nifty have rallied 9% each as compared to around 3% rise in benchmark indices at 0920 hours.

The RBI will offer a concessional window for banks to swap FCNR dollar deposits mobilized for a minimum tenor of three years and over, at a fixed rate of 3.5% per annum for the tenor of the deposit.

It has also decided that the current overseas borrowing limit of 50% of the unimpaired Tier I capital will be raised to 100% and the borrowings mobilized under this provision can be swapped with RBI at the option of the bank at a concessional rate of 100 basis points below the ongoing swap rate prevailing in the market. These schemes are open for banks until November 30.

Some of the measures aimed at liberalizing financial markets include enabling exporters/importers to re-book cancelled forward exchange contracts to the extent of 50% for exporters (from 25%) and 25% for importers, introduction of cash settled 10 year interest rate future contracts and examining introduction of interest rate futures on overnight interest rates.