The Nifty Bank index slid 250 points on Monday, its first significant dip in two weeks, after the Reserve Bank of India announced a hike in the minimum daily cash reserve requirement to 99% from 90%.
RBI’s decision comes amid a backdrop of surplus liquidity, which stood at ₹3.88 lakh crore as of 8 October, and an imminent open‑market operation sale of ₹25,000 crore scheduled for 13 October. The higher CRR is intended to curb excess liquidity generated by FCNR inflows, tightening the banks’ funding base.
In the index, PNB, Yes Bank and State Bank of India all fell more than 1%, while Axis Bank and Canara Bank trailed at roughly a 1% loss. Only AU Small Finance Bank and HDFC Bank managed modest gains, underscoring the uneven impact of the CRR change across different banks.
Analysts warn that the tighter reserve regime could raise short‑term funding costs, especially for lenders with weaker deposit franchises. Banks with robust liquidity and a strong deposit base are better positioned to absorb the shock, but the market will monitor future RBI interventions and the outcome of the planned OMO sale.