Good news for the likes of DLF but more competition for HDFC and peers

The RBI also proposed to permit rural cooperative banks to extend finance to commercial real estate-residential housing projects within the existing limit of 5 percent of total assets.

A majority of stocks in interest rate-sensitive pockets such as real estate and financial services rose after RBI Governor Shaktikanta Das announced the Monetary Policy Committee's unanimous decision to raise the repo rate — the key rate at which it lends money to commercial banks — by 50 basis points, on top of a surprise 40-bps hike on May 4.

The Nifty Realty — which tracks 10 stocks, including Indiabulls Real Estate, Phenix, Suntech, Prestige and Brigade — rose as much as 2.6 percent after RBI announcements.

"Cooperative banks have their importance in the last mile connectivity of our large and highly diversified population group. Enhancing the outdated limit is expected to boost growth in these banks," said Ashutosh Mishra, head of research, Institutional Equity at Ashika Group.

The moves will support book growth and profitability for urban cooperative banks as they will be able to cater to a wider set of customers, said Aashay Choksey, Assistant Vice President-Financial Sector Ratings at ICRA.

They may increase competitive intensity in micro markets where urban cooperative banks operate alongside scheduled banks and non-banking financial companies, he said.

"Growth in urban cooperative banks has lagged that in scheduled commercial banks in the past years, which is reflected in the low credit-to-deposit ratio," he said.

The latest RBI action is viewed to give a fillip to property developers, it is likely to increase competition for lenders — which are already stepping up efforts to counter fintech-led disruptions.