Canara Bank, Bank of India, Federal Bank, Yes Bank, Punjab National Bank, Kotak Mahindra Bank, ICICI Bank and Bank of Baroda are down between 2-4%, while State Bank of India (SBI), IndusInd Bank and Axis Bank are down 1% each on the National Stock Exchange (NSE).

Bank Nifty, the NSE banking share index, has dipped 229 points or 1.25% or 230 points at Rs 18,053 as compared to 0.60% decline in CNX Nifty at 1137 hours. The banking index hit a low of 18,036 so far.

Since October 7, Bank Nifty had rallied 20.4% against 8.6% rise in the benchmark index till yesterday.

SBI, ING Vysya Bank, Andhra Bank, Karnataka Bank, DCB Bank had rallied 30-37%, while Yes Bank, ICICI Bank, Axis Bank, Bank of India, Allahabad Bank, Oriental Bank of Commerce and Central Bank of India gained between 24-29% during the period.

Meanwhile, according to 10 major banking and rating organisations polled by Business Standard unanimously said the Reserve Bank of India (RBI) was unlikely to lower the rate in its next monetary policy review on December 2, a majority saw the first rate cut happening in April next year.

The rating agency CRISIL expect RBI to remain on hold for this fiscal despite the recent moderation in Inflation.

CRISIL Research study shows that factors behind the recent slowdown in economic growth and investment in India have little to do with high interest rates.

“While, the primary reason for the slowdown has been a sharp fall in the expected return on investments due to policy uncertainty and slowing domestic demand. Thus a rate cut will yield little return while at the same time increasing the risks of reversing the recent gain in inflation”, CRISIL said in November 2014 report.