Bank shares tank up to 6% amid govt plans for higher borrowing
The amount is Rs 70,000 crore, or 12.5 per cent, higher than the borrowings in the current fiscal ending next month, and is likely to impact profitability of banks, analysts said.
SBI scrip plunged 5.80 per cent to Rs 2,085.40, while PNB tanked 5.79 per cent to Rs 787.90 on the BSE.
Union Bank was down 5.50 per cent, Bank of India – 5.38 pc, BoB - 4.48 pc, Canara Bank - 4.28 pc, ICICI Bank – 3.86 pc, IDBI Bank - 5.89 pc and Axis Bank - 3.96 pc.
The BSE Banking index slipped 3.59 per cent to 13,203.87. In the Union Budget 2013-14, presented by Finance Minister P Chidambaram in Parliament today, the government's market borrowings are pegged at Rs 6.29 lakh crore, higher than Rs 5.59 lakh crore in FY'13.
"Indian economy is still going through a stress period and rate cuts are not happening. It means that there is definitely a liquidity shortage. If the government is going to raise market borrowings, liquidity will be impacted further," said Kishor Ostwal, CMD of CNI Research.
"It will also impact the profitability of banks," he added.
In the worst Budget day show since 2009, the BSE 30-stock index, Sensex, tanked 291 points to end below 19,000-level, as the government slapped more taxes on companies as well as super-rich and offered
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