Business
The stocks of state-run and private banks fell nearly 4% on Monday, after the Reserve Bank of India levied an incremental CRR to rein in the excess liquidity in the economy. The government's move to demonetize Rs 500 and Rs 1,000 notes has led to a huge spike in bank deposits as people deposit their old Rs 500 and Rs 1,000 notes before the last date.
Updated : Mar 22, 2018, 03:39 AM IST
The stocks of state-run and private banks fell nearly 4% on Monday, after the Reserve Bank of India levied an incremental CRR to rein in the excess liquidity in the economy. The government's move to demonetize Rs 500 and Rs 1,000 notes has led to a huge spike in bank deposits as people deposit their old Rs 500 and Rs 1,000 notes before the last date.
RBI Governor Urjit Patel who spoke about demonetization for the first time since the post-announcement press conference on November 8, said, "it has been decided to absorb a part of the surplus liquidity by applying an incremental cash reserve ratio (CRR) as a purely temporary measure."
A notification on the RBI website said, scheduled banks shall maintain an incremental CRR of 100% effective the fortnight beginning November 26, 2016. While this will absorb the surplus liquidity, it will leave adequate cash with the banks to meet the credit needs of the productive sectors of the economy, RBI said.
A day after the announcement, the stocks of banks fell on the BSE and National Stock Exchange (NSE).
State Bank of India's shares were down 2.51% at Rs 254 apiece; Punjab National Bank's were down 2.21%, IDBI Bank 1.18%, ICICI Bank 2.02%, YES Bank 1.68%, Bank of Baroda 3.40%, Bank of India 2.76% from previous day's close. Bank Nifty index on the National Stock Exchange was down 218.45 points or 1.18% lower at 18288.85. The share price of banks on the NSE was also up to 3%.
Bank stocks on BSE
Bank | Share Price on BSE | Change from previous close | Percentage change |
State Bank of India | Rs 254.40 | Rs 6.55 | 2.51% |
Punjab National Bank | Rs 137.20 | Rs 3.10 | 2.21% |
IDBI Bank | Rs 67.25 | Rs 0.80 | 1.18% |
ICICI Bank | Rs 254.60 | Rs 5.25 | 2.02% |
YES Bank | Rs 1,147.85 | Rs 19.65 | 1.68% |
Bank of Baroda | Rs 162.15 | Rs 5.70 | 3.40% |
Bank of India | Rs 117.90 | Rs 3.35 | 2.76% |
Bank of Maharashtra | Rs 29.15 | Rs 0.35 | 1.19% |
Axis Bank | Rs 463.05 | Rs 8.30 | 1.76% |
Bank stocks on NSE
National Stock Exchange (NSE)