Bank stocks fall after RBI's decision to keep policy rates unchanged

Shares of banks Wednesday fell up to 3.5 per cent after the Reserve Bank of India kept interest rates unchanged.

Shares of IDFC bank declined 3.46 per cent, IndusInd bank 2 per cent, ICICI bank 1.93 per cent on the BSE.

Among others, Kotak Mahindra Bank dropped 1.39 per cent, Axis Bank 1.30 per cent and State Bank of India 0.74 per cent.

Led by losses in these stocks, BSE Bankex ended 1 per cent lower at 29,599.99 and BSE Private Bank Index fell 0.95 per cent to 10,534.67.

The central bank kept benchmark repurchase (repo) rate unchanged at 6.5 per cent but held out a promise to cut them if the upside risks to the inflation do not materialise.

Having raised rates twice this year, the central bank retained its 'calibrated tightening' policy stance.

The central bank retained the GDP growth forecast for the current fiscal at 7.4 per cent.