RBI's rate cut to spurt activity in banking stocks

This festive season have started on a positive note with the new appointed RBI hunk Urjit Patel cutting the repo rate by 25bps. The repo rate is considered to be important as it is the rate at which banks borrows from the central bank. Bank will then pass on this benefit to its customer who have taken loan. The decision of the Governor will be cheered by the markets on October 5, keeping the banking scrips in focus.

The time of bringing in the rate cuts is highly appreciable as this is the time when most of the loans are processed by the banks as there is a large chunk of consumers applying for the loan citing festive demand. Consumer’s on the other hand will be tempted to borrow as they will have to repay lower interest rates.

The S&P BSE Bankex is expected to open in green on October 5, Bank of Baroda, Kotak Bank, Federal Bank, Punjab National Bank, Axis Bank, SBI, ICICI Bank, IndusInd Bank, Yes Bank will remain in focus and are expected to open in green on October 5.