Yes Bank leads gainers in 'A' group

Financial Technologies (India), Axis Bank, Federal Bank and Jaiprakash Power Ventures are among the other gainers.

Yes Bank surged 21.55% to Rs 287.35. The stock topped the gainers in the BSE's 'A' group. Bank stocks jumped after new Reserve Bank of India (RBI) chief Raghuram Rajan on Wednesday, 4 September 2013, said that RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country and also said that there is need to reduce the requirement for banks to invest in government securities in a calibrated way so as to ensure the flow of credit to the productive sectors of the economy.

Among other measures, the new central bank chief said there was a need to accelerate the working of debt recovery tribunals and asset reconstruction companies and he will encourage banks to clean up their balance sheets and commit to raising capital when necessary.

Financial software maker Financial Technologies (India) spurted 16.39% to Rs 131.40. The stock was second biggest gainer in 'A' group.

Axis Bank galloped 15.63% to Rs 927.45. The stock was third biggest gainer in 'A' group. Axis bank clarified during trading hours today, 5 September 2013, that its total direct and indirect exposure to the National Spot Exchange (NSEL) is insignificant and that the bank has adequate collateral to back these exposures. Axis Bank issued the clarification amid media reports that it and two other private sector banks viz. ICICI Bank and HDFC Bank have the highest exposure to NSEL.

Another trigger for the rally in the Axis Bank counter was the removal of restrictions by the RBI on foreign institutional investors (FIIs) on buying shares of Axis Bank as the overall foreign share holding in Axis Bank fell below the prescribed limit of 49%. Foreign share holding in Axis Bank under the portfolio investment scheme have gone below the prescribed threshold limit stipulated under the extant FDI Policy, the RBI said in a statement. Hence, the restrictions placed on the purchase of shares of Axis Bank are withdrawn with immediate effect, the central bank said.

Total foreign holding in Axis Bank was 48.96% as at 30 June 2013, of which 40.70% was held by FIIs.

The NSEL had to shut down its operation since 1 August 2013 following the government direction in the wake of violation of certain rules. NSEL is grappling with the problem of payment settlement after the suspension. It has given eight-month plan to settle Rs 5574.31 crore to investors. NSEL is scheduled to make a payout every Tuesday for 30 weeks, ending in March 2014. Financial Technologies (India) is one of the two promoters of the NSEL.

Federal Bank jumped 12.38% to Rs 274.20. The stock was fourth biggest gainer in 'A' group.

Power generation firm Jaiprakash Power Ventures climbed 11.31% to Rs 14.47. The stock was fifth biggest gainer in 'A' group.

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