The experts have two view. There are those who think that banking stocks could be in deep trouble like Daniel Tabbush, head-regional banks research of CLSA. And then there are the likes of S Naganath of Blackrock Investment Managers.

Both of them have recently given interviews to CNBC TV18 and were of two opinions.

For Tabbush, "Aggressive growth has led to shrinking of Tier-I ratio. I expect asset quality pressures to aggravate in Indian banks." He was also of the opinion that though most of the current concerns are priced in SBI but that does not mean more bad news will not send the stock down. Tabbush further added that the private banks share price do not factor in the asset quality and other concerns and hence shocks could come from there.

On the other hand, Nagnath pointed out that the banking sector all over the world is battered for now. This is why, there is a possibility that stocks of banks can actually go up if the policy makers around the world come up with a plan to stabilize the banking sector.

Clearly, when a proposal is put forward by policymakers that seem to be sufficiently large, credible and long lasting, I think bank stocks around the world could move up quite nicely.

Banking Sector should be be monitored closely, as there will be opportunities in selective stocks for short-term investors and also for event based investing.

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