Banking stocks hit again despite status quo in credit policy

Business

oi-Sunil

By Sunil Fernandes

Published: Tuesday, July 30, 2013, 12:30 [IST]

Although it was widely expected that the RBI would hold repo and CRR rates steady, banking stocks lost ground, as short sellers continued to dump these stocks.

Most of the private sector and public sector banking stocks were trading lower, except ICICI Bank which managed to hold steady in trade.

Among the losers from the private banking space were HDFC Bank and IndusInd Bank, while PSU banking stocks that lost ground were Oriental Bank, State Bank, Union Bank and Canara Bank.

The much awaited RBI Monetary Policy Review turned out to be a non event, as the RBI left key policy rates unchanged.

The RBI has left the cash reserve ratio (CRR) of scheduled banks at 4.0 per cent of their net demand and time liabilities, which was the same as before. The repo rates also has not been touched, thus largely maintaining the status quo on major policy instruments.

The RBI has said that the recent liquidity tightening measures aimed at checking undue volatility in the foreign exchange market will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling monetary policy to revert to supporting growth with continuing vigil on inflation.

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