June 27, 2018 / 6:23 AM / a month ago

BUZZ-Shares of Indian state-run banks sink on RBI's financial stability report

** Nifty PSU bank index falls as much as 2.3 pct to 5-week low

** Stress in banking sector continues as gross NPA ratio rises further, Reserve Bank of India (RBI) said in its financial stability report here released on Tuesday

** Macro-stress tests indicate under baseline scenario, scheduled commercial banks’ GNPA ratio may rise to 12.2 pct by March 2019 from 11.6 pct in March 2018 and system-level capital to risk-weighted assets ratio (CRAR) may come down to 12.8 pct from 13.5 pct - RBI

** RBI added 11 public sector banks under prompt corrective action framework may experience worsening of their GNPA ratio to 22.3 pct from 21.0 pct, with six of them likely experiencing capital shortfall relative to required minimum CRAR of 9 pct

** Sensitivity analysis indicates that a severe shock to the GNPA ratio could bring down the CRAR of as many as 20 banks, mostly PSU banks, below 9 pct - RBI

** Syndicate Bank Ltd falls as much as 7.2 pct to 40.60 rupees, its lowest since March 2009, while Bank of India Ltd declines as much as 4.4 pct to 88.15 rupees, its lowest since June 2016

** Oriental Bank of Commerce Ltd slides as much as 4.1 pct to 72.8 rupees, its lowest since April 2003

** For the year, the PSU bank index had declined 22.2 pct as of Tuesday

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