Banking stocks turned green on Monday after FM Nirmala Sitharaman announced upfront release of Rs 70,000 crore for public sector banks on Friday. This will benefit the corporate, MSMEs, retail borrowers and small traders, she said.SBI, RBL Bank, ICICI Bank, HDFC Bank, Axis Bank, YES Bank and Kotak Mahindra Bank were the top gainers in the banking sector.
BSE bankex rose 885 points to 31,329 against previous close of 30,444 in early trade. However, the index pared gains on profit booking and was trading just 148 points higher at 10:00 am.
Bank Nifty too pared gains within 15 minutes of trade. The index which rose 717 points to 27,675 against previous close of 26, 958 was trading 155 points higher at 27,113 at 10: 00 am.
Sitharaman said that banks have agreed to pass on the rate cuts through MCLR reduction. This will benefit all borrowers, old and new, alike. Banks would soon launch loan products linked to repo rate or an external benchmark.
FM Sitharaman also announced that public sector banks will have to ensure that loan documents are mandatorily returned to the borrower within 15 days of loan closure. This is expected to help borrowers who have mortgaged assets.
Meanwhile, Sensex and Nifty too pared gains from early trade. Sensex was trading 38 points lower at 36,662 and Nifty was down 8 points to 10,821.
Edited by Aseem Thapliyal
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