Local managers of Mumbai-based stock broking firms have been urging investors not to panic, explaining that the decline was due to global factors like Foreign Institutional Investor (FII) unloading of shares, weakening dollar against rupee, booming crude prices and the resultant bear hug.

According to M Yusuf Saiyed, LKP Shares and Securities branch manager here, who has succeeded in diverting finances from the Muslim community to the stock exchange through the Shariah compliant stocks, the volumes suffered a beating due to high volatility, which had impacted intra-day operations.

But long time investors have a chance to buy in the dull market, he opined, adding that the market also fell because of the overall decline in bourses across the world.

Some local factors like uncertainty over the Centre reimbursing the Rs 60,000-crore loan debt waived, had seen bank shares falling and this had caused panic among investors. Though the farm loan waiver was not exactly going to be a loss to the banks, on the contrary, it was going to improve the recovery regime, analysts have said.

"In fact, from the banker's point of view, since most of the bank loans have been written off, banks have an option to continue recovering dues from defaulting farmers," said a prominent nationalised bank official, adding, "Write off is a unilateral and open option for a bank with which the loanee has nothing much to do while in waiver, banks lose the recovery option."

It has not been made clear in the Budget as to who will be eligible for waiver and whether long pending dues and dues accumulating over past two or three years will be treated at par. It has left banks confused, he said.