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Shares of state-run banks fell about 1 per cent today, a day after the central bank board meeting.
The Nifty PSU bank index dropped as much as 1.7 per cent, in its biggest single-day per cent loss in a week.
The Reserve Bank of India (RBI) on Monday decided to set up an expert panel to examine the economic capital framework of the central bank, in a move that could prompt a rethink of what constitutes adequate capital reserves for the RBI
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, Jefferies has said.
Morgan Stanley calls the takeaways from the meeting as a ”temporary relief” for state-run banks, but the government will have to raise recapitalisation amount for sustained improvement in growth.
HSBC has said in a note that tensions may have subsided, indicating broad alignment.
Bank of India and Union Bank of India Ltd shares were down 1.3 per cent each while State Bank of India shares were down 0.8 per cent.
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