Banking stocks unable to stimulate with the RBI rate cuts

The BSE Bankex is currently trading at 3,820.86, down by 1.77% from its previous closing. Most of the  banks whether public or private were trading in  the red.

SBI was trading at Rs 944.30, down by 13.25 points or 1.38% from its previous closing on the BSE.

ICICI Bank was trading at Rs 280.50, down by 3.80 points or 1.34%.

HDFC Bank was trading at 827.05 down by 11.75 points or 1.40% on the BSE.

Kotak Bank was trading down by 5.79% or 13.55 points  to Rs 220.40.

The Reserve Bank of India (RBI) on Wednesday reduced the repo and reverse rates by 50 basis points (bps) each, a move that will prompt banks to reduce lending and deposit rates.

The repo rate, the rate at which RBI lends to banks, has been cut to 5%, while the reverse repo rate, or the rate at which the central bank absorbs liquidity, has been reduced to 3.5%.Over the past three months, RBI has slashed the reverse repo rate 250 basis points. With the latest repo rate reduction, the fifth since October 20, the overall cut since the global credit crisis intensified totals up to 400 basis points.