Banking Stocks under Pressure.

Banking stocks were under selling pressure on rumors of the Reserve Bank of India (RBI), which has already raised the cash reserve ratio thrice since December 2006, contemplating another hike, though only on incremental deposits this time.

There is a buzz in the market that the decision can come today evening. CRR is the percentage of deposits that banks are required to keep with the RBI.

Shares from the banking and financial space were down. ICICI Bank (down 1.16% to Rs 899.10), HDFC (down 0.99% to Rs 1737.50), and HDFC Bank (down 1.24% to Rs 1075.10) declined.

RBI is particularly concerned about absorbing excess liquidity since it has lowered the inflation target from 5-5.5% to 4-4.5% for 2007-08.