Bank stocks down for second day on crop loan waiver concerns

New Delhi: Bank stocks, including Karnataka Bank and Federal Bank, continued to remain under pressure falling by up to 2 per cent today after the Karnataka government announced crop loan waiver. Shares of Federal Bank went down by 1.81 per cent, Karnataka Bank declined by 1.36 per cent, Central Bank of India dipped 1.36 per cent, Indusind Bank lost 1.35 per cent and Axis Bank (0.83 per cent) on BSE.

The BSE Bankex index plunged 28.29 points, or 0.11 per cent, to 26774.50 today. YES Bank fell by 0.71 per cent, ICICI Bank (0.53 per cent), Bank of Maharashtra (0.51 per cent) and Bank of Baroda (0.06 per cent). Bank stocks had fallen up to 3 per cent in the previous session also. Facing mounting pressure from farmers and opposition parties, the Karnataka government today announced crop loan waiver of up to Rs 50,000 per farmer, that will cost Rs 8,165 crore to the state exchequer.

Karnataka has become the fourth state this year to take such step following Uttar Pradesh, Maharashtra and Punjab. On Monday, Punjab had announced total waiver of crop loans up to Rs 2 lakh of small and marginal farmers, and a flat Rs 2 lakh relief for all marginal farmers, irrespective of the loan amount.