Indian banking stocks have plunged $95 billion since March, and further pressure on the stock market may come from the central bank's foreign exchange controls.

Analysts say that the tightening controls on the rupee trading by the Reserve Bank of India, coupled with rising energy prices weighing on profit prospects, Indian bank stocks may face further declines. Jefferies estimates that banks closing out forex trades under guidance from the Reserve Bank of India could incur losses of up to 50 billion rupees. Data from the National Securities Depository Limited of India shows that in just the first two weeks of March, global investors withdrew 327 billion rupees from financial services company stocks, setting a record. The Nifty Bank index has lost 95 billion US dollars in market value since early March, narrowly avoiding a technical bear market. Kranthi Bathini, stock strategist at WealthMills Securities, said, "Due to the possibility of a tight monetary policy, these stocks may come under further pressure in the short to medium term."