Banks tumble after RBI hikes key interest rates

Shares of 14 banks fell by 3.49% to 12.76% at 11:16 IST on BSE after the Reserve Bank of India raised key interest rates by 25 basis points at a mid-quarter policy review today, 20 September 2013.

Yes Bank (down 12.76%), IndusInd Bank (down 8.97%), Bank of India (down 8.76%), Punjab National Bank (down 8.61%), Union Bank of India (down 8.14%), Federal Bank (down 8.02%), Canara Bank (down 7.78%), Bank of Baroda (down 6.53%), ICICI Bank (down 5.74%), Axis Bank (down 5.63%), HDFC Bank (down 4.64%), Kotak Mahindra Bank (down 4.46%), State Bank of India (down 4.20%) and IDBI Bank (down 3.49%), edged lower.

The S&P BSE Bankex was down 5.43% at 12,008.69. It underperformed the S&P BSE Sensex, which was down 1.99% at 20,236.20.

The Reserve Bank of India (RBI) increased the policy repo rate by 25 basis points (bps) to 7.5% with immediate effect after mid-quarter review of the monetary policy today, 20 September 2013. The central bank kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4%.

RBI reduced the marginal standing facility (MSF) rate by 75 bps from 10.25% to 9.5% with immediate effect. It also reduced minimum daily maintenance of the CRR from 99% of the requirement to 95%.

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