Banking stocks slip ahead of RBI policy
As the Pranab Mukherjee presents his Union Budget 2012, Industry experts give their reaction.
Banking stocks traded lower ahead of the credit policy review later today. The central bank is likely to hold rates steady in its mid-quarter review of monetary policy today.
The banking index on the Bombay Stock Exchange was down 0.5% at 0932 hours in-line with the broader markets. Barring Bank of Baroda (which rose on the news of addition to the Nifty index) and HDFC Bank, the other 12 banking stocks traded in the red on the banking index.
Yes Bank (-1.5%) was the top loser on the banking index. Bank of India (-1.2%), ICICI Bank (-0.9%) and State Bank of India (-0.7%) also traded lower.
"The RBI has already hiked the CRR aggressively. I think the RBI will wait maintain a status quo and wait for the annual policy. Inflation is still at 6.95%... the RBI will wait for the Budget to see the outlook on deficit financing before taking a call," SL Bansal, CMD of Oriental Bank of Commerce told NDTV Profit today.
The central bank has not cut rates for nearly three years. In this period, the repo rate, which is the rate at which banks borrow money from RBI, has gone up by 3.5 per cent to 8.5%.
Only 27 per cent respondents in a poll of bankers' conducted by NDTV Profit said the RBI will cut the repo rate by 0.25 per cent today. 94% respondents said the central bank will start cutting rates in April 2012.
