Three top private bank stocks plummet over laundering allegations
15 March 2013The stocks of top three private sector banks that are likely to face a regulatory probe over money laundering allegations were under pressure this morning. The banks are ICICI Bank (the biggest loser), Axis Bank and HDFC Bank.
On Thursday, online magazine Cobrapost claimed to have conducted a pan-India undercover investigation in which it has found HDFC Bank, ICICI Bank and Axis Bank running a nation-wide money laundering racket (See: E-magazine 'sting' claims routine money-laundering at 3 banks).
"These money laundering services are being openly offered to even walk-in customers who wish to launder their illicit money; a variety of options for laundering ill-gotten cash are being offered brazenly; and practically as a standard product across the country," Cobrapost claimed.
While the stocks of the three banks have come off their 52-week high, they are still holding on to gains they had witnessed during the market rally over the year. But their loss had a significant impact on the Bank Nifty that crashed by nearly 200 points on the National Stock Exchange.
ICICI Bank stock shed Rs46.80 at Rs1,063.70 on the NSE with a trading volume of about 23.71 lakh shares. The stock has come off the year's high of Rs1,232 it had touched on 31 January but is far above the 52-week low of Rs767.40 it had touched on 4 June last year.
Axis Bank was also off its 52-week high of Rs1,516.05 touched on 30 January. Today, the stock shed Rs21.30 to trade at Rs1,331.50 with a trading volume of about 10.38 lakh shares. This stock had also gained substantially over the year after falling to its 52-week low of Rs922 on 18 May last year.
HDFC Bank stock (face value Rs2) was down by Rs8.15 at Rs641.10 with about 12.90 lakh shares having been traded. This stock was also off its 52-week high of Rs705.50 touched on 30 November 2012 and also way above its yearly low of Rs482.20 touched on 23 May last year.
The pressure on the three banks' stocks had an impact on the Bank Nifty that shed about 196 points around noon today.
The other Bank Nifty constituents escaped relatively unscathed, with Bank of India, Punjab National Bank, , Union Bank and Kotak Mahindra Bank making small gains.