The Hindu Business Line : Pvt bank stocks down on RBI draft guidelines

Brokers said these guidelines were unexpected and looks unrealistic. "If these guidelines are implemented as they are, the interest in private sector banks stocks will go away," said a broker.

Last week RBI had issued draft guidelines on the ownership of private banks where an individual or a group cannot hold more than 10 per cent stake in a bank. These guidelines are issued at a time when the industry was looking at consolidation.

Some of the banks that closed lower on Monday included Dhanalakshmi Bank (down 8.23 per cent at Rs 102 on BSE), IndusInd Bank (7.26 per cent at Rs 46.60), Karnataka Bank (6.95 per cent at Rs 81.70), Bank of Rajasthan (6.74 per cent at Rs 33.20), South Indian Bank (6.12 per cent), ING Vysya Bank (5.19 per cent at Rs 377.35), IDBI Bank (down 5.48 per cent at Rs 37.10)

There was fall in the stock price of other private banks such as ICICI Bank, UTI Bank and HDFC Bank. However, the stock price of Kotak Mahindra Bank closed marginally higher after opening lower in the early trades.

Brokers said overall impact is negative for the private banks, but the concern for the bigger banks is not much as the holding is more widespread and even if the stake has to be sold there will be enough buyers for the stake.

While some brokers said the RBI guidelines are difficult to implement and there would be some changes.

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