Bank stocks mixed as RBI keeps key policy rate steady

Bank stocks were mixed at 15:00 IST on BSE after the Reserve Bank of India kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%.

Among public sector banks, Bank of Baroda (down 1.69%), Punjab National Bank (down 1.23%), Andhra Bank (down 1.16%), Bank of India (down 1.32%), State Bank of India (down 1.1%) and IDBI Bank (down 0.66%) edged lower. Corporation Bank (up 0.33%), Dena Bank (up 0.29%), Indian Bank (up 0.12%) and Vijaya Bank (up 0.34%) edged higher.

Among private sector banks, Axis Bank (down 1.3%), HDFC Bank (down 1.15%), IndusInd Bank (down 1.01%), Yes Bank (down 0.29%), Kotak Mahindra Bank (down 0.2%) edged lower. RBL Bank (up 0.19%) and Federal Bank (up 0.14%) edged higher.

Meanwhile, the S&P BSE Sensex was down 156.91 points or 0.59% at 26,235.85.

ICICI Bank was down 1.42%. The bank announced after market hours yesterday, 6 December 2016, that the committee of executive directors of the bank is scheduled to have a meeting on 9 December 2016, to consider fund raising in single/multiple tranches in any currency through public/private placement by way of issuances of debt instruments etc. for the remaining period of the financial year ending 31 March 2017 (FY 2017).

On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, 7 December 2016, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%. Consequently, the reverse repo rate under the LAF remains unchanged at 5.75%, and the marginal standing facility (MSF) rate and the bank rate at 6.75%.

The decision of the MPC is consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5% by Q4 March 2017 and the medium-term target of 4% within a band of plus or minus 2%, while supporting growth.

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