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 1605.45BSE Quote20.85 (1.30%)
NSE 1621.05NSE Quote7.45 (0.46%)
YES Bank: Quotes, News
BSE 1720.10BSE Quote18.85 (1.10%)
NSE 1720.75NSE Quote17.35 (1.01%)
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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