The Bank Nifty fell 0.51% to 22,604.95 on Friday after an Ordinance promulgated by the Centre to amend the Banking Regulation Act to empower the banking regulator disappointed the market. The index clocked its biggest single day fall in two weeks. The gauge rose to an intra-day life-time high of 22,853.55 before settling at 22,604.95. Nifty PSU Bank Index, Nifty Private Bank Index and BSE Bankex too fell in sympathy. Nifty PSU Bank index fell 2.2%, Nifty Private Bank index fell 0.6% and BSE Bankex index fell 0.59%, or 151.53 points, to 25,679.62 points.
HDFC Bank fell 2.6%, IndusInd Bank 0.86%, SBI 1.02%, Yes Bank 1.11%, IDFC Bank 1.44%, Axis bank 2.77%, Punjab National Bank 2.87% and Bank of Baroda 4.27%. Gainers in the Nifty Bank Index were Federal Bank, Canara Bank, Kotak Mahindra Bank and ICICI Bank.
Banking stocks slipped as investors booked profits after the Centre notified the Banking Regulations Amendment ordinance as it tries to accelerate resolution of stressed assets. “This ordinance is a positive endorsement of the Insolvency and bankruptcy code, 2016 and reinstated this government’s intent to resolve the growing NPA problem in our banking system. However, in our opinion, there should be caution since this code is not the answer to all the maladies,” said Ashish Chhawchharia, partner at Grant Thornton Advisory.