Punjab National Bank, Canara Bank, Kotak Mahindra Bank, Yes Bank, SBI, Axis Bank, Bank of Baroda, ICICI Bank and HDFC Bank declined up to 2 percent.
Nifty Bank slipped below 25,000-mark as banking stocks fell further in morning trade Thursday after the Reserve Bank of India expectedly cut repo rate by 25 basis points to 6 percent on Wednesday.
The news already seems priced into stock prices, hence the reason for fall in banks could be profit booking.
The Nifty Bank index was down 202 points or 0.81 percent at 24,852.70, at 9:45 hours IST.
The Reserve Bank of India (RBI), in its third bi-monthly monetary policy review (2017-18), reduced the policy repo rate by 25 basis points. Consequently, the reverse repo rate under the LAF also reduced from 6 percent to 5.75 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25 percent.
Four of the six members of the Monetary Policy Committee voted for a 25 bps rate cut, whereas one voted for a 50 bps cut and one voted for no cut in repo rate.
The RBI kept the cash reserve ratio (CRR) unchanged at 4 percent of their net demand and time liability (NDTL) and SLR at 20 percent.
"The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth," Stewert and Mackertich said.The retail inflation is at its record low at 1.54 percent print in June 2017 and we believed the stage was set for a rate cut, it added.
Get Lok Sabha 2019 Live Election Results, constituency-wise tally, news, views and analysis
Follow our Lok Sabha Election Result Live Blog here.