Lenders' shares under pressure ahead of FM-bankers' meet later today

Banking shares displayed weak trend in early trade ahead of the all bankers’ meet with finance minister Arun Jaitley later today. The BSE Bankex fell 0.6 percent to 19,739.19 as against a 0.1 percent drop in benchmark Sensex.

At 10 am, shares of Bank of Baroda declined 2.2 percent to Rs 145.15, YES Bank 1 percent to Rs 796.75, HDFC Bank 0.9 percent to Rs 990.35, Bank of India 0.7 percent to Rs 171.95, PNB 0.6 percent to Rs 131.70 and SBI 0.5 percent at Rs 252.60.

On Thursday, Reserve Bank of India (RBI) Deputy Governor S.S. Mundra had said a planned $1.2 billion capital infusion by the government into state-run lenders during the fiscal year to March 2016 will not be enough.

“We’ve been taking it up with the finance ministry. This is the time when many of the banks are in need of higher capital,” Mundra was quoted as saying in the report.

Agenda for the meeting includes persuading the banks to pass the benefits of the rate cuts by RBI to the borrowers in a bid to give a fillip to economic growth, according to a PTI report.

The Reserve bank of India has cut the repo rate by a cumulative 0.75 percent this year. While some banks have cut their rates, the extent of the cuts does not equal the benefits.

However, PSU banks hope that finance minister may address issues involving fund recapitalisation of banks which are already starved of capital while NPAs are rising at alarming level in past few quarters.