Cashing in on the good equity market conditions,fund managers raised their exposure to bank stocks to more than Rs 26,800 crore in September over the preceding month.
According to the latest data available with the Securities and Exchange Board of India (Sebi),the mutual fund (MF) industrys investment in banking stocks stood at Rs 26,838 crore as on September 30,accounting for 15.75 per cent of their total equity assets under management (AUM) of Rs 1.70 lakh crore.
In August,mutual funds exposure to banking stocks had touched the lowest level in four years to Rs 22,744 crore.
However,the investment had risen to as high as Rs 43,659 crore in December 2012.
Market participants attributed the increase in investment in banking shares to measures announced by the new Reserve Bank of India (RBI) chief Raghuram Rajan coupled with overall surge in the stock market.
Banking stocks climbed in September,after falling for four consecutive months,on value buying and a slew of measures announced by the Reserve Bank of India.
During September,the banking index (bankex) surged by 6.4 per cent,while the 30-scrip sensitive index (Sensex) rose four per cent.
The RBI Governor,in September,had announced steps to stabilise the Indian currency and liberalise the banking system,including higher overseas borrowing limits for lenders and simpler processes for opening branches.