Bank stocks drop 6-8 pc, may drop further

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Mumbai, Mar 31 (UNI) In the backdrop of high inflationary conditions and possiblity of hike in Cash Reserve Ratio (CRR) and repo rate by the Reserve Bank of India (RBI), the bank stocks hammered badly on the Indian bourses today.

Bankex on Bombay Stock Exchange (BSE) dropped 5.89 per cent, while Bank Nifty slipped 5.44 per cent as the benchmark indices today sharply fell over four per cent.

Frontline private sector lenders like ICICI Bank and HDFC Bank slipped 7.71 per cent, while leading public sector banks like State Bank of India, Punjab National Bank, Bank of Baroda and Bank of India posted a loss of 6 to 7 per cent.

Martket analysts are of the view that the banking stocks were hit badly and are likely to slid further on account of high possibilities of hike in CRR and repo rate as well as banks facing the challenge of stucked credit offtake.

IDBI Bank had declined to implement its announced benchmark prime lending rate (BPLR) cut. And, there is less chance that banks would mull over rate cut.

''In the recent future, there is very less possibility that private or public sector would dare to cut the rates in the present situation,'' HDFC Bank chief economist Abheek Baruah said.

Inflation has hit a 59-week high at 6.68 per cent, according the data released on Friday, and government has promised that it would take every measure to cap the rising inflation.

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