Banking scrips have become the favourite hunting ground for bear operators.
Analysts say the risk perception about banks has heightened in the recent past.
The report of an RBI inspection of banks revealing massive underestimation of non-performing assets has increaxsed the anxiety for FIIs. Some marketmen also feel that the prospect of interest rates firming up and the effect that it would have on provisioning requirements of banks hadalso contributed to the nervous selling in the market. Contraction of credit growth and a fall in the market share of public sector banks, in both lending as well as deposits, are also cited as the reason for the current drubbing of banking stocks on the bourses. According to RBI figures, nationalised banks have lost market share during the first quarter of the current fiscal to foreign banks. The public sector banks' share of overall credit has fallen to 47.8 per cent for the first quarter of the current fiscal from 48.3 per cent in the previous quarter.