Banks, housing financial institutions and NBFCs were not spared in trading today. Even FII favourite HDFC came in for severe selling pressure with the stock dropping 4.29 per cent in trade. The worst hit were IndusInd Bank and Yes Bank with the latter dropping 8.69 per cent in trade.
Infra financier IDFC shed 7.69 per cent, while the nation's largest private sector Bank, ICICI Bank was down 5.38 per cent.
PSU banks also dropped, but largely the price erosion was lesser given the lesser dependence to borrow from the RBI. State Bank of India was down 4.86 per cent, while PNB was down 5.71 per cent.
Under the MSF banks were borrowing from the RBI at repo rate, plus 1 per cent, which effectively meant 8.25 per cent. But, with effect from July 17, banks would now have to borrow at 10.25 per cent, which is a good 2 per cent over and above the existing rates. This is likely to see margins contracting.