Shares in Yes Bank, Indusind Bank whacked on RBI measures

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 Shares in Yes Bank, Indusind Bank whacked on RBI measures
IndusInd Bank: Quotes, News
BSE 1490.00BSE Quote0.05 (0.00%)
NSE 1490.65NSE Quote0.5 (0.03%)
YES Bank: Quotes, News
BSE 1448.55BSE Quote33.1 (2.29%)
NSE 1449.70NSE Quote34.2 (2.36%)
Shares in Yes Bank and IndusInd Bank were whacked out of shape as the RBI hiked the marginal standing facility for banks (MSF) to 10.25%, indirectly pushing borrowing costs for banks higher. Yes Bank was down 8 per cent, while IndusInd Bank dropped by 5 per cent in trade. All other private sector and PSU banking stocks were trading significantly lower.

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.
In other significant move the RBI also fixed the limit for borrowing at 1% of the of the Net Demand and Time Liabilities (NDTL) of the banking system, reckoned as Rs.75,000 crore for this purpose. The allocation to individual banks will be made in proportion to their bids, subject to the overall ceiling. This change in LAF will come into effect from July 17, 2013.

Read more about: yes bank, rbi, indusind bank
Story first published: Tuesday, July 16, 2013, 10:05 [IST]
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