The Reserve Bank of India has retained its interest rate, or repo rate, for the 12th straight time at 6.50 per cent. RBI Governor Shaktikanta Das, in his address post the central bank's 52nd Monetary Policy Committee meeting, also made some other crucial announcements.
The RBI cut the CRR by 50 basis points. This brings CRR to 4 per cent, from the previous 4.5 per cent.
The CRR signals the amount of the deposited money that a bank is expected to retain with itself. A decrease in this rate gives banks lending room.
The banking shares have reacted to these two major developments.
Axis Bank Ltd
Mumbai-based privately held bank, Axis bank was one of the biggest gainers. Axis Bank shares rose by 1.58 per cent or Rs 18.40.
This took the overall value of the bank's shares to Rs 1,184.80 per piece.
Bank of Baroda Ltd
When we look at the publically held banks, the Bank of Baroda gained the most among PSBs. The shares of BoB rose by 1.38 per cent or Rs 3.59.
This took the overall value of the bank's shares to Rs 263.57 per share.
State Bank of India
The biggest lender in the country, the government-owned State Bank of India had a relatively lukewarm reaction to the developments from the RBI building.
The shares of SBI vacillated a little, making marginal gains of 0.17 per cent or Rs 1.45, taking the overall value of the shares to Rs 866.90.
ICICI Bank Ltd
ICICI Bank also witnessed a similar movement at Dalal Street in the intraday trade on Friday.
The shares of the Mumbai-based bank gained only by 0.11 per cent or Rs 1.50, spiking its overall value to Rs 1,338.00 per share.
Punjab National Bank
PNB shares also rose by 1.18 per cent or Rs 1.29. This tool the overall value to Rs 110.37 per piece.
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HDFC Bank Ltd
When we look at the biggest bank in country, in terms of market capitalisation, HDFC Bank unlike the other banks in this list, went the opposite direction.
The shares of HDFC Bank dipped by 0.38 per cent or Rs 7.15. This took the overall of the bank's shares to Rs 1,858.60 per piece.
