Sensex Struggles, Banks Under Pressure Over RBI Move

Indian markets struggled on Monday as banking stocks suffered a selloff after the RBI on Saturday unexpectedly ordered banks to deposit their extra cash with it, in a bid to absorb excess liquidity generated by a government ban on larger banknotes. 

So banks will not earn interest on the excess deposits, thus impacting their profitability, say analysts. 

The Sensex was down around 50 points while Nifty was near 8,100. 

The rupee also weakened to 68.57 against the dollar as compared to Friday's close of 68.46. 

The banking stock sub-index, Nifty Bank, was down 1.5 per cent, with Bank of Baroda, ICICI Bank and SBI down between 2 per cent and 3 per cent.