State-run banks extend rally on new deadline for Basel III

Reuters Market Eye - State-run banks extend recent gains after RBI on Thursday extended the deadline for banks to implement Basel III capital rules by a year to March 31, 2019, due to concerns from the industry on potential stress to asset quality.

State Bank of India gains 3 percent, Bank of Baroda 2.16 percent and Punjab National Bank nearly 4 percent.

"Additional capital requirements for FY15-FY16 for public sector banks would almost halve after RBI's move," an analyst tracking the sector at a foreign brokerage said.

Banks have surged this month - with the NSE bank sub-index up nearly 18 percent on hopes of a recovery in the domestic economy, the Reserve Bank of India's potentially easing monetary policy and broker upgrades.

 

(Reporting by Abhishek Vishnoi)