Banking stocks may see durable bounce: Ajay Srivastava

Ajay Srivastava, CEO of Dimensions Consulting told CNBC-TV18, "It will be a deceptive bounce to the extent that people think things have changed but the band aid measures which Reserve Bank of India (RBI) put in the last week was not going to change very much because we saw a strange phenomenon for instance we saw the government bound yields going down and all the banks raising their interest rates in the last week. So we are having a situation where the RBI, the central government and everybody is trying to do measures which are stop gap. It doesn’t address the basic issue of the economy and therefore you will see a bounce back.”

“May be some of the shares have been oversold. But except for banking sector that is where we have lot of positives coming in the next week or so because the policy initiatives we may not like it but they will add to the share value of the banks. Things like tweaking the norms of the held-to-maturity for the bonds that they carry on the books which makes them avoid booking the loss.”

“We will see NPA provisions been tweaked by infrastructure companies, that will benefit the banks. So fundamentally the banks may change a lot in the next two-three weeks as RBI moves in with more measures. But on the economy side the debt laden companies nothing has changed for them. So if you are asking for a bounce back in those companies, it is going to be a deceptive. Banks may see a lot more durable bounce back."