Banking stocks under pressure: Nifty Bank drops over 1.5%; Axis Bank, Bank of Baroda, PNB slide 3% each

Banking stocks tumble as Nifty Bank drops over 1.5% after RBI tightens bad loan norms—track key resistance and support levels now.

Written by Sparsh Bansal

April 30, 2026 13:53 IST

A professional financial chart showing the Nifty Bank index downward trend alongside an infographic explaining the Three Stages of Loan Risk under the new RBI ECL norms.

The transition to the Anticipated Credit Loss framework is forcing Indian banks to reallocate capital. (AI generated image)

The banking stocks were among the major losers today. HDFC Bank, ICICI Bank, and Axis Bank have fallen over 3% each. While the Nifty 50 and Sensex dropped over 1.4%, the Nifty Bank Index dropped over 1%.

Axis Bank is the major loser in the Nifty Bank, dropping over 3%. The stock was followed by Bank of Baroda, falling 3%, Canara Bank, which declined 2.6%, Punjab National Bank dropped 2.7%, and other stocks. Except for AU Small Finance Bank and IndusInd Bank, all the constituents of Nifty Bank were trading in the red.

Bank stocks under pressure: How has RBI action impacted sentiment

Over the last three sessions, the banking stocks have been trending downwards after the Reserve Bank of India (RBI) tightened bad loan norms.

The banking regulator tightened rules against bad loans, requiring banks to set aside more capital against potential losses on their loan and credit portfolios.

The RBI announced that under new rules, banks must categorise loans into three stages based on the risk of future issues. This change aligns with global standards.

Transitioning to an anticipated credit loss framework, as suggested by the RBI in early 2023, would require banks across the board to allocate additional capital for future loan defaults, which could result in a profit decline and have a negative impact on their net worth.

“Momentum remained mixed, with strength in IndusInd Bank and IDFC First Bank, while Federal Bank and Union Bank of India exhibited weakening trends. Immediate resistance is placed at 56,500, with critical support at 54,300,” said Religare Broking in a research note.

Nifty Bank has dropped 2.4% in the last five trading sessions. The index has surged 6.6% in the past one month and 5% in the last six months. However, the index changed a little over the previous one year.

Nomura on implementation of ECL Norms

Implementation of the ECL norms will result in higher upfront provisioning, especially in unsecured retail, MSME and corporate exposures. The impact on PSU and mid-tier banks will be higher; several PSU banks have highlighted that the one-time provisioning hit could impact net worth by 3-9%. Large private banks are better placed, in our view, as the transition impact would be lower given provision buffers of 2–4% of net worth. The key disappointment is that, according to media reports, banks had sought relief, particularly on Stage 2 floors, but the RBI has not acceded, retaining the 500 basis points minimum vs 40 bps currently provisioned.

What’s the outlook on markets now

In the note, the brokerage said that the immediate resistance is placed in the 24,200–24,350 zone, followed by a crucial hurdle near 24,600. On the downside, a decisive break below the short-term moving average (20 DEMA) could drag the index towards the 23,550–23,800 range.

“We continue to recommend a stock-specific approach based on sectoral strength, while utilising rebounds in crude-sensitive themes and IT stocks for shorting opportunities,” said Religare Broking.

This article was first uploaded on April thirty, twenty twenty-six, at fifty-three minutes past one in the afternoon.