Banking stocks plunge; BOB, Union Bank tank up to 8%
Mumbai: Banking stocks on Wednesday fell up to 8 percent after RBI proposed incremental provisioning and capital requirements for banks' exposure to corporates having unhedged forex exposure.
Among bluechips, SBI's shares dropped 4.58 percent to Rs 1,899.60, ICICI Bank was down by 1.46 percent to Rs 1,063.40 and HDFC Bank fell by 0.99 percent to Rs 651.15 on the BSE.
Bank of Baroda tumbled 7.83 percent, Union Bank plunged 7.43 percent, Bank of India (6.23 percent), PNB (5.27 percent) and Federal Bank (3.25 percent).
Following the losses in these stocks, the BSE banking index lost 2.33 percent to close the day at 12,969.26.
Market experts said the draft norms on banks' exposure to corporates with unhedged forex led to selling in banking counters.
"The guidelines suggest higher provisions, risk weights for exposure to corporates with unhedged foreign currency exposures (UFCE). Since provisions/risk weights apply to total banking exposure, it will impact banks...." brokerage firm Emkay Global said.
Meanwhile, in the broader market, the BSE benchmark Sensex was down by 286.06 points and ended the day at 19,177.76.