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Business News » India News

SBI, IndusInd Bank, BoB, Yes Bank, to ICICI Bank, here is how they reacted to RBI repo rate cut

A rate cut is definitely a good sign for both banks and borrowers, as lending rates come down.   

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SBI, IndusInd Bank, BoB, Yes Bank, to ICICI Bank, here is how they reacted to RBI repo rate cut
RBI repo rate cut by 25 bps has been announced and it is definitely a good sign for both banks and borrowers. Photo: Reuters
Written By: ZeeBiz WebTeam
Updated: Thu, Jun 06, 2019
12:45 pm
Mumbai, ZeeBiz WebDesk
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RBI repo rate cut by 25 bps has been announced and it is definitely a good sign for both banks and borrowers, as lending rates come down. While, loans for home, personal or automobiles become attractive. However, investors seem to have lost faith in banking stocks the moment RBI Governor Shaktikanta Das and the MPC members ruled in favor of a rate cut. At around 1213 hours, the S&P BSE Bankex was trading at 35,111.05 down by 371.47 points or 1.05%. While Nifty Bank slumped by 294.20 points or 0.93% performing at 31,294.85. 

It would be public sector banks (PSBs) who were most in shock, even though a rate cut was already in offing with CPI Inflation staying well within the target of RBI. 

The Nifty PSU Bank was trading at 3,210.80 lower by 63 points or 1.92%. Stocks like Syndicate Bank, Bank of Baroda, Allahabad Bank, Union Bank, Bank of India, SBI, Canara Bank and Oriental Bank of Commerce (OBC) plunged by 1.34% to 3.40%. Meanwhile, lenders like Jammu & Kashmir Bank, PNB and Indian Bank dropped between 0.46% to 1%. Also, Central Bank saw muted sentiments. 

As for Nifty private bank, the index swung below 178.05 points or 1.01% trading at 17,487.15. Lenders like IndusInd Bank, IDFC First Bank, Yes Bank and Federal Bank plunged by 2.18% to 4%. On other hand, stocks like ICICI Bank, Axis Bank, RBI Bank, HDFC Bank and Kotak Mahindra Bank slid between 0.24% to below 1%. It was only DCB Bank that was trading in green at Rs 239.35 up by nearly 1%. 

Significantly, MPC members have also revised their stance of monetary policy from neutral to accomodative. The policy repo rate now stands at 5.75% with reverse repo rate at 5.50%. 

Drop in banking stocks can be attributed to stringent method taken by RBI in strengthening lending rates, digital payments and ATM services. However, as far as common man is concerned, this comes as a massive good news if and when the lenders pass on the benefits to them.

 

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TAGS:
Banking Stocksrbi rate cutSBIHDFC BankIndusInd BankYes BankICICI BankKotak Mahindra BankRBI policyRBI Monetary policy
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