The new trading week appears to have started on bad note for state-owned banks in the most populous country on the planet. While major indices, including Nifty Bank were trading in Green, shares of state-owned PSBs are stumbling down the blocks. Nifty Bank was trading at a 0.43 per cent gain (1120 IST).
SBI Plunges by Over 2 per cent
The biggest bank in the country, lost a massive 2.60 per cent in the early half of the day's trade on Monday, 6 May. This chaos is being attributed by many observers to the Reserve Bank of India's draft on a harmonised prudential framework for lenders, thereby tightening the norms for lenders in the larger picture.
Some of the propositions from the central bank include instating, and thereby tightening lending criteria for banks. The second point concerns an increase in standard asset provisioning to 1-5 per cent of loans. Currently, these figures stand at 0.5 per cent.
PSBs Struggle at D-Street
These factors appear to have had an impact on the country's Public Sector Banks. This, as apart from the aforementioned case of SBI, other banks also appear to be struggling to allay fears of trouble in the equity market.
Here, Bank of India, another major PSB, was trading (1130 IST) at a deficit of 2.64 per cent, with the price of each individual share standing at Rs 145.85. Bank of Baroda also lost a mammoth 3.12 per cent. Union Bank of India, meanwhile, also garnered significant losses as the value of its shares also dropped by 3.97 per cent.
Punjab National Bank, which has found itself in controversy in the past, appears to be the biggest loser amongst the vying PSBs, as it lost a consequential 5.08 per cent, taking the value of its individual share to Rs 128.90.
Meanwhile, as PSBs struggle at Dalal Street, private banks appear to enjoying a relatively relaxed day, as ICICI Bank was trading in green, having gained 0.35, since the beginning of the day. HDFC bank gained 0.44 per cent and IndusInd bank gained 1.32 per cent on Monday, as all major PSBs struggled to assuage fears of investors.
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