Banking shares under pressure; Nifty PSU Bank index falls nearly 5%

Oriental Bank, BOI, BOB, Union Bank, PNB, Andhra Bank, Allahabad Bank and Syndicate Bank were down over 5% each.

Banking shares mainly public sector undertaking (PSUs) are under pressure with Nifty PSU Bank index falling nearly 5% after the ratings agency Fitch said that the progressive increase in minimum capital requirements under Basel III is likely to put nearly half of Indian banks in danger of breaching capital triggers.

At 02:31 pm, Nifty PSU Bank index, the largest loser among the sectoral indices, was down 4.8% on the National Stock Exchange (NSE), as compared to 1.7% decline in the Nifty 50 index and 2.3% fall in the Nifty Bank index.

Public sector banks are the most at risk, given their poor existing capital buffers and weak prospects for raising capital through market channels, the ratings agency said. LINK

Oriental Bank of Commerce, Bank of India (BOI), Bank of Baroda (BOB), Union Bank of India, Allahabad Bank, Punjab National Bank (PNB), Andhra Bank and Syndicate Bank were down more than 5% each.

YES Bank, State Bank of India (SBI), Canara Bank, Federal Bank, Axis Bank, ICICI Bank and IndusInd Bank were down between 2%-5% on the NSE.