Bank shares extend losses; Bank Nifty dips 1%

Banking shares have extended losses for the second straight session on National Stock Exchange (NSE) after the Reserve Bank of India (RBI) Governor Raghuram Rajan decided to leave repo rate unchanged at its credit policy meet yesterday.

Bank Nifty, the banking share index is down 1.2% or 235 points at 19,148 at 10.15 hours. Meanwhile, the benchmark CNX Nifty is down 22 points at 8,734.75.

State Bank of India (SBI), ICICI Bank, Bank of Baroda, Canara Bank, Punjab National Bank, Union Bank, IndusInd Bank and Bank of India are down between 0.5-3.5% on the NSE.

Having chosen to stay his hand on the repo rate, Governor Raghuram Rajan did take his foot off the brake a little by reducing the statutory liquidity ratio (SLR) by 50 basis points to 21.5 per cent of net demand and time liabilities.

“Given there was no development on the inflation or fiscal fronts since January 15, we have maintained status quo on interest rates... We have the Budget coming up. We will have new GDP (gross domestic product) numbers on February 9, which will reflect a whole new view of what is happening in the Indian economy,” Rajan told reporters after announcing the sixth bi-monthly policy review on Tuesday.