We are observing selling in US banks after imposition of Financial Transaction Tax. One more reason could also be the ban on short selling in Europe. As Global Investors cannot benefit from shorting their banking positions in Europe, they might be hedging their global risk by shorting Banks in US. 

Is the impact percolating down to India as well? It seems so. The last two trading sessions have seen huge additions of Open Interest in Bank Nifty, as also in almost all Banking Stock futures combined with sharp erosion in price. 

Banks have also suffered due to incessant rate hikes by the Reserve Bank of India. Rising Non Performing Assets and slowing credit growth are also hurting the balance sheets of domestic lenders.