European funds selling Indian banks - dealers

European funds are selling shares of Indian private banks such as ICICI Bank Ltd and Axis Bank Ltd , according to three institutional dealers who service buyside investors.

The NSE Bank index has fallen 25 percent since mid-July, when the RBI started tightening liquidity.

Traders say the continued selling in banking shares is a concern given foreign investors have high ownership of Indian banks.

Both ICICI Bank and Axis Bank have a nearly 40 percent foreign holding, according to exchange data.

"Funds have started focusing on those banks who are most geared to industrial and infrastructure sector, which are slowing," said an institutional sales person at a foreign brokerage house.

ICICI Bank ended down 0.78 percent while Axis Bank fell 4.5 percent.