PSU Bank Stocks Fall Today (Oct 12, 2026): SBI Drags as RBI Tightens Daily CRR Rule

PSU bank stocks fell today, Monday 12 October 2026, and the fall put them near the bottom of the table. The Nifty PSU Bank index finished among the two weakest sectors on the NSE, next to FMCG, while on the BSE the PSU Bank index closed 1.05% lower, ET Now reported. State Bank of India was one of the bigger drags on the Sensex.

PSU bank stocks fall today: what happened

Banks were on the back foot most of the day, and the wider banking pack went with them. The Nifty Bank lost 339 points to 54,918, CNBC-TV18 reported, and the channel linked the selling to the RBI’s stricter cash reserve rules.

Key figures

• BSE PSU Bank index: -1.05%
• Nifty Bank: -339 points to 54,918
• Nifty 50: -157.10 points (-0.70%) to 22,363.35
• Sensex: -547.65 points (-0.76%) to 71,924.68
• Sensex laggards included: ITC, Tech Mahindra, Hindustan Unilever, Larsen & Toubro, SBI and TCS

Why sellers went after state-run lenders

The trigger goes back to 9 October, when the RBI raised the minimum cash reserve banks have to keep every single day. Starting with the fortnight that begins 16 October, banks must hold at least 99% of their required CRR daily, up from 90%. The headline CRR doesn’t move and stays at 3% of deposits, Mint reported. The idea is to soak up surplus liquidity after the FCNR(B) deposit scheme pulled in $127 billion of foreign-currency deposits.

When day-to-day liquidity gets tighter, short-term money market rates usually drift up towards the repo rate, which the RBI lifted to 5.50% on 7 October. That can nudge funding costs higher for banks. There’s a second hit too. Higher bond yields knock down the value of the government bonds that public sector banks carry in large amounts.

PSU banks carry large government bond portfolios, so a rising-yield, tighter-liquidity environment hits them on two fronts at once: funding costs and treasury income.

The wider session

All this happened on a day when the broader market gave up its early gains, weighed down by foreign fund outflows and expensive crude. Smallcaps still ended higher. Read our Bank Nifty report and our explainer on the RBI CRR rule change.

What it means for investors

Keep in mind that the CRR change doesn’t raise the reserve ratio itself, and economists quoted by Mint called it a temporary liquidity step. From here, bank stocks will likely take direction from Q2 results, especially what managements say about net interest margins and treasury gains or losses, and from where bond yields go. We track the daily moves on our Stock Market Today India hub.

Sources: ET Now, CNBC-TV18, Mint. Not investment advice.