Bank stocks cheer RBI measures; surge over 21%
Mumbai: Bank stocks Thursday rose sharply by over 21 percent after new RBI Governor Raghuram Rajan announced a slew of measures related to the sector.
Yes Bank shares skyrocketed by 21.55 percent to Rs 287.35 at the BSE and it was the best performer among the 13 stocks on the BSE banking index.
Axis Bank shares rallied 15.63 percent, while Federal Bank soared by 12.38 percent.
Among bluechips, SBI surged 9.74 percent, while ICICI Bank was up 9.20 percent, HDFC Bank (7.53 percent) and PNB (7.23 percent).
Following the smart rally in these stocks, the BSE banking index settled the day at 11,014.99, up 9.30 percent and was the top gainer among the 13 sectoral indices.
ICICI Bank, SBI and HDFC Bank together added 244.6 points to the Sensex gain.
The benchmark Sensex ended the day with a gain of 412.21 points at 18,979.76.
The Reserve Bank yesterday allowed banks to swap funds mobilised through foreign currency deposits to attract overseas funds.
"It has been decided accordingly to offer such a window to the banks to swap the fresh foreign currency non-resident (banks) FCNR(B) dollar funds, mobilised for a minimum tenor of three years and over at a fixed rate of 3.5 percent per annum for the tenor of the deposit," RBI said in a notification yesterday.
It said based on requests received from banks, it has also been decided that the current overseas borrowing limit of 50 percent of the unimpaired Tier I capital may be raised to 100 percent.
Raghuram Rajan, who yesterday took charge as the 23rd Governor of the central bank, said the new bank licences will be issued around January next year.
Also, banks will soon no longer need RBI's permission to open branches, while foreign lenders will be encouraged to operate through wholly owned subsidiaries, Rajan said as he unveiled his reform agenda for the banking sector.