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Sensex Ends 34 Points Higher, Banking Shares Fall After RBI Move

NDTV Profit logo NDTV Profit 28-11-2016

Sensex and Nifty edged up on Monday with lenders being the biggest drag after the central bank unexpectedly ordered banks to deposit their extra cash with it, although overall sentiment was upbeat as Asian shares advanced.

The Reserve Bank of India on Saturday asked banks to maintain a temporary incremental cash reserve ratio (CRR) of 100 per cent to absorb excess liquidity from the system after the government's move to withdraw larger banknotes sparked a surge in deposits.

The Nifty PSU Bank Index, an index of state-run lenders, ended 2.55 per cent lower as the CRR move is likely to deprive banks of earning interest on funds parked with the RBI.

The Nifty Bank index ended 1.11 per cent lower. "It (CRR move by RBI) is a short-term measure... Sentiment would remain weak," said Gaurang Shah, vice president, Geojit BNP Paribas Financial Services.

The broader NSE Nifty ended 13 points or 0.16 per cent higher at 8,126.90 with Bank of Baroda, State Bank of India and ICICI Bank being the biggest losers.

The benchmark BSE Sensex ended 34 points higher at 26,350. Lenders were among the biggest decliners with State Bank of India down closing 2.84 per cent lower and Bank of Baroda fell 2.89 per cent.

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