Bank stocks rise on RBI move, industry welcomes measures

Steps to expand RBI balance sheet needed, welcome: Kotak

The Bombay Stock Exchange (BSE) building is pictured next to a police van in Mumbai, India, August 24, 2015. India's benchmark BSE index fell more than 5 percent on Monday to their lowest in a year, as a rout in Chinese equities sparked widespread unrest in global financial markets. REUTERS/Danish Siddiqui

Bank stocks gained on Wednesday after the RBI unveiled measures to support the economy facing headwinds due to the second wave of the pandemic.

Kotak Mahindra Bank jumped 2.42%, Axis Bank 2.41%, Indusind Bank 2.33%, ICICI Bank 1.88%, State Bank of India 1.07% and HDFC Bank 1%on the BSE.

The BSE Bank index gained 1.67%. The 30-share BSE index also gained 424.04 points or 0.88 per cent to close at 48,677.55.

On RBI’s measures, Uday Kotal, president, Confederation of Indian Industry said governor Shaktikanta Das had taken the financial sector battle against Covid 2.0 ‘head-on with a clear focus on protecting lives and livelihoods’.

“The steps taken to expand the RBI balance sheet are needed and welcome,” Mr. Kotak added. SBI Chairman Dinesh Khara said, “The RBI has continued to calibrate policy throughout the pandemic, and the series of measures announced reflects a novel approach.”

On the Term Liquidity Facility of ₹50,000 crore to ease access to emergency health services. Rahul Prithiani, director, Crisil Research said, “Penetration of hospitals may increase as players can now opt for funding towards capex. The scheme is a good boost to stalled capex plans by players,” he said.

(With inputs from Lalatendu Mishra)