Banking stocks seeped in red

Banks are having a very rough run on the bourses. Out of the 40 stocks, 36 are on the decline. Only one bank is a gainer- Lakshmi Vilas Bank. Vijaya Bank hit a new 52-week low at Rs.37.65, Yes Bank, Central Bank, Oriental Bank are amongst the top losers.

The reason for this rout in the banking stocks is on account of the report put out by the rating agency, Fitch. The rating agency has said that the 11 licenses issued to payment banks will increase competition for other existing banks, especially PSU banks and it goes on to say that it could affect the long term market share.

Fitch has said that focus on smaller deposit holders and mobile banking will add to competitive pressures for public banks, and could potentially pose risks to their market share over the long- term.