New Delhi, May 4 -- Banking stocks have seen significant selling pressure this year so far amid mixed earnings and weak market sentiment due to geopolitical factors. Recently, they experienced additional headwinds as fresh regulatory changes around how banks need to provision for loans spooked investors.

The Reserve Bank of India (RBI) has issued the "expected credit loss (ECL)" framework mandate, with 1 April 2027 as the deadline. Under the new guidelines, financial assets will be classified in three stages, depending on whether there has been a significant rise in credit risk since initial recognition.

The Bank Nifty is down 8% this year so far, mirroring the trend in the benchmark Nifty 50, which has also lost 8% this year so far. St...