State-run banks rally after RBI extends Basel III deadline

Shares of state-run banks today ended with as much as 9 per cent gains after the Reserve Bank extended deadline for meeting Basel III norms to March 2019.
Stocks of SBI surged 3.52 per cent to settle at Rs 1,904.30 on the BSE.
Buying was also seen at counters like Union Bank of India that rallied 9.23 per cent, while Punjab National Bank rose by 6.87 per cent, Allahabad Bank by 5.95 per cent and Bank of Baroda by 5.26 per cent.
Led by the gains in these stocks, the BSE bankex index shot-up by 1.19 per cent to close at 14,585.16.

RBI yesterday extended deadline for banks to implement global capital norms, Basel III, by a year to March 2019 on concerns of potential stresses on the asset quality and profitability of the banks.
As per the RBI notification, the transitional period for full implementation of Basel III Capital Regulations in India is extended up to March 31, 2019, instead of as on March 31, 2018.
"This will also align full implementation of Basel III in India closer to the internationally agreed date of January 1, 2019," RBI said.
"The RBI's deferral of the Basel 3 implementation deadline by a year has eased the pressure on banks to issue hybrid capital in FY15. This is a practical outcome of the current limited investor appetite for such instruments and the new deadlines do not dilute the spirit of Basel 3," said Ananda Bhoumik, senior director, India Ratings & Research.