Bank stocks cheer Raghuram Rajan booster shot, surge over 21%, Yes Bank, Axis Bank shares skyrocket

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Axis Bank shares rallied 15.63 per cent, while Federal Bank soared by 12.38 per cent. Reuters Axis Bank shares rallied 15.63 per cent, while Federal Bank soared by 12.38 per cent. Reuters
SummaryFollowing the smart rally in banking stocks, BSE bank index was the top gainer among the 13 sectoral indices.

Bank shares on Thursday rose sharply by over 21 per cent after new RBI Governor Raghuram Rajan announced a slew of measures related to the sector. Yes Bank shares skyrocketed by 21.55 per cent to Rs 287.35 at the BSE and it was the best performer among the 13 stocks on the BSE banking index.

Axis Bank shares rallied 15.63 per cent, while Federal Bank soared by 12.38 per cent.

Among bluechips, SBI surged 9.74 per cent, while ICICI Bank was up 9.20 per cent, HDFC Bank (7.53 per cent) and Punjab National Bank (PNB) (7.23 per cent).

Following the smart rally in these stocks, the BSE banking index settled the day at 11,014.99, up 9.30 per cent and was the top gainer among the 13 sectoral indices.

ICICI Bank, State Bank of India (SBI) and HDFC Bank together added 244.6 points to the BSE Sensex gain.

The benchmark Sensex ended the day with a gain of 412.21 points at 18,979.76.

The Reserve Bank yesterday allowed banks to swap funds mobilised through foreign currency deposits to attract overseas funds.

"It has been decided accordingly to offer such a window to the banks to swap the fresh foreign currency non-resident (banks) FCNR(B) dollar funds, mobilised for a minimum tenor of three years and over at a fixed rate of 3.5 per cent per annum for the tenor of the deposit," RBI said in a notification yesterday.

It said based on requests received from banks, it has also been decided that the current overseas borrowing limit of 50 per cent of the unimpaired Tier I capital may be raised to 100 per cent.

Raghuram Rajan, who yesterday took charge as the 23rd Governor of the central bank, said the new bank licences will be issued around January next year.

Also, banks will soon no longer need RBI's permission to open branches, while foreign lenders will be encouraged to operate through wholly owned subsidiaries, Rajan said as he unveiled his reform agenda for the banking sector.

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