This was the highest level since January 2013, when fund managers had shored up their investment in banking shares to Rs. 42,760 crore. This was also the second consecutive monthly rise in exposure.The investment in the sector had risen to a record high of Rs. 43,659 crore in December 2012.
MFs have shown interest in banking stocks since September last year primarily on account of measures announced by Reserve Bank Governor Raghuram Rajan coupled with overall surge in the stock market.
In September 2013, MFs' exposure in banking stocks increased to Rs.26,838 crore after touching the lowest level in four years at Rs. 22,744 crore in August last year.The banking index surged by 18.6 per cent in March this year, while the 30-scrip BSE sensitive index Sensex rose 6 per cent.
Mr Rajan, in September last year, had announced steps to stabilise the Indian currency and various measures to liberalise the banking system, including higher overseas borrowing limits for lenders and simpler processes for opening branches.
Banking was followed by software sector, where MF investments stood at Rs. 24,315 crore. Pharma stocks accounted for Rs. 16,066 crore, while consumer non-durables attracted Rs. 12,947 crore and petroleum products at Rs. 10,909 crore.