Shares of public lenders fell nearly 1 percent, a day after 9-hour long RBI board meet. The Nifty PSU bank index plunged about 1.7 percent, in its biggest single-day percentage loss in a week.
Shares of public lenders fell nearly 1 percent, a day after 9-hour long RBI board meet. The Nifty PSU bank index plunged about 1.7 percent, in its biggest single-day percentage loss in a week. The shares of Bank of India and Union Bank of India are down 1.3 percent each while State Bank of India down 0.8 percent.
After an unprecedented power tussle over the last few weeks, government and RBI, in a marathon meeting on Monday, appeared to have reached a common ground on providing relief to MSMEs and easing lending restrictions on a few public sector banks. The central bank decided to set up an expert panel to examine the economic capital framework, in a move that could prompt a rethink of what constitutes adequate capital reserves for the RBI.
What global brokerages say
Jefferies analysts believe outcomes were fairly logical “although by no means conclusive. “Additional capital infusion would be required should the government want the banks to push balance sheet growth, the global brokerage says.
Morgan Stanley calls the takeaways from the meeting as a “temporary relief” for state-run banks, but government will have to raise recapitalisation amount for sustained improvement in growth.
HSBC says in a note that tensions may have subsided, indicating broad alignment.
Meanwhile, Sensex and Nifty, the headline indices for the domestic stock markets, opened lower on Tuesday tracking weak global cues. The 30-share Sensex slumped 131 points to 35,643 in the opening trade, while the broader Nifty 50 opened below the psychological 10,750-mark.