Bank stocks today fell on fears of higher provisions for bad debts.
NSE’s sub index for bank shares fell as much as 2.5 per cent, lowest since October 28.
ICICI Bank plunged 3.8 per cent, HDFC Bank dropped 1.24 per cent and State Bank of India declined 2 per cent.
RBI Governor Raghuram Rajan today said he would look into how the country’s banks are using provisions they were given to help tackle a crippling bad debt burden.
Banks are facing criticism over their use of strategic debt restructuring (SDR), which helps banks swap unpaid debt for majority control.
Investors are worried that accounts under SDR may attract early provisioning, according to traders.