NEW DELHI: Bank stocks tumbled up to 5 per cent today amid reports of the RBI's mandate which required them to go for higher provisioning for those stressed loans marked for insolvency courts.
Shares of Syndicate Bank plunged 4.97 per cent, Punjab National Bank 4.69 per cent, Andhra Bank 4.03 per cent, Allahabad Bank 3.88 per cent, Bank of Baroda (3.64 per cent), SBI (3.27 per cent), Union Bank of India (2.83 per cent), Bank of Maharashtra (2.63 per cent) and AXIS Bank (2.34 per cent) on BSE.
Among others, Federal Bank slipped 2.13 per cent, Yes Bank (1.47 per cent), ICICI Bank (1.20 per cent), Kotak Mahindra Bank (1.13 per cent), HDFC Bank (0.63 per cent) and Indusind Bank (0.52 per cent).
The BSE bank index fell by 1.45 per cent to close at 26,234.14.
"RBIs guideline to maintain higher provision against the loans under the insolvency process has impacted the market direction and plunged the market to test the support level of 9,500. RBIs action will impact earnings potential for banks and finally impact investor’s expectation for FY'18 earnings growth," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.
The benchmark Sensex today plunged 179.96 points to end at 30,958.25