March 14, 2018 / 4:36 AM / 3 months ago

BUZZ-Indian lenders fall after central bank bans credit guarantees

** Indian banking stocks such as Punjab National Bank (PNB) and Canara Bank Ltd fall in morning trade

** The Reserve Bank of India on Tuesday barred all lenders from issuing letters of undertaking (LoU) - a form of credit guarantee

** Overall trade credit business contributed 3-4 pct for public banks, which should be at risk - Kotak Securities

** A key worry would be to see the impact of the current guideline on interest rates and possible risk of higher delinquency for a small segment of customers, Kotak says

** Meanwhile, PNB told police on Tuesday that it had uncovered additional exposure of about 9.42 bln rupees ($144.83 mln) to the Gitanjali group, taking its overall exposure in connection with the fraud to well over the $2 bln mark

** PNB falls as much as 4.8 pct to 93.30 rupees, posting its biggest intraday pct loss in two weeks; stock down 42.9 pct this year as of Tuesday’s close

** Canara Bank shares drop as much as 4.2 pct to 241.35 rupees

** Nifty PSU Bank Index down as much as 2.2 pct ($1 = 65.0400 Indian rupees)

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