Everyone's focus is on bank shares, after the instructions of RBI, fluctuations in the shares of these banks continue today
The Reserve Bank of India tightened consumer loan rules on many banks in the country. Since this morning everyone's focus has been on bank shares. Let us tell you that the stock market continues to fall this morning. Nifty Bank is also trading with a decline today. Know which banks' stocks are trading with maximum decline today.
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Recently, the Reserve Bank of India has tightened the rules for consumer loans. After this decision, a period of selling started in the shares of listed banks in the stock market. Shares of bank and NBFC companies fell by up to 7 percent in morning trade on Friday.
Shares of State Bank of India fell by 3.34 percent. At the same time, Axis Bank shares fell by 3 percent, Canara Bank shares fell by 2.67 percent and Bank of Baroda shares fell by 2.31 percent. Federal Bank (1.39 percent), HDFC Bank (1.26 percent), ICICI Bank (1.16 percent) and IndusInd Bank (0.89 percent) also declined on the BSE.
BSE Bankex index fell 1.12 percent and Nifty Bank index is also trading with a decline.
Among non-banking financial companies, shares of SBI Cards and Payment Services fell 6.70 percent. At the same time, shares of Ujjivan Financial Services (5 percent), Arman Financial Services (3.91 percent), and IIFL Finance (3.78 percent) are also trading down.
The Reserve Bank of India on Thursday tightened norms for consumer loans. RBI has directed banks and NBFCs to set higher risk weights for personal loans. Its objective is to make lenders more cautious. At the same time, the risk weight on unsecured consumer loans has been increased by 25 percentage points.
However, the new rules will not apply to home loans, education loans, vehicle loans, and loans secured by gold and gold jewelry. Higher risk weight means lenders need to set aside more money as a safety net for consumer loans. This can make the loan more expensive. In simple words, high-risk weight limits the ability of banks to lend.
RBI said in its circular that it has been decided to increase the risk weight with respect to consumer loan exposure (outstanding and fresh) of banks. This also includes personal loans, but excluding home loans, education loans, vehicle loans, and loans secured by gold and gold jewelry, the rate has been increased by 25 percentage points to 125 percent.
