Mar 15, 2013, 11.52 AM | Source: Moneycontrol.com
HDFC Bank, the second largest private sector in India, dropped nearly 2 percent on Friday after the foreign research house Goldman Sachs recommended a sell rating on the stock.
The target price for the stock is at Rs 560, according to the report.
"Money laundering allegations if true could lead to slower growth as RBI may direct private sector banks to focus on improving risk management rather than expanding," Goldman Sachs reasoned.
On Thursday, CobraPost's pan-India undercover investigation accused the lender along with two other banks, namely ICICI Bank and Axis Bank , of running a vast, nation-wide money laundering racket. The stock lost 2% as soon as the news became public but recovered all its losses after the bank clarified on money laundering charges.
Money laundering is way of converting black money into white through any unscrupulous bank transaction.
Shares slipped 1.33 percent to Rs 640.95 on Bombay Stock Exchange at 11:16 am.