Bank stocks fall after recent gains as farm loan waivers weighed on the domestic sentiment.

Nifty PSU bank index was down as much as 1.34 per cent, while the Nifty Bank index slipped as much as 0.62 per cent.

The drop comes after Nifty Bank index hit a record high on Friday; up nearly 30 per cent this year.

Nifty PSU bank index has risen 18 per cent this year.

Sentiment for lenders also took a hit after Maharashtra had agreed on Sunday to forgive all loans held by farmers.

Bank of India fell as much as 3 per cent, while Punjab National Bank fell as much as 2.83 per cent.