MUMBAI: The Reserve Bank on Tuesday assured the general public that the Indian banking system is safe and stable and there is no need for panic based on rumours.

The RBI statement came on a day when the Nifty Bank index tanked by 1.30 per cent in intra-day trade amid a barrage of negative news from the sector, including a deepening crisis at the Punjab and Maharashtra Co-operative Bank (PMC).

"There are rumours in some locations about certain banks including cooperative banks, resulting in anxiety among the depositors. RBI would like to assure the general public that Indian banking system is safe and stable and there is no need to panic on the basis of such rumours," the Reserve Bank said in a tweet.

Bank stocks lost heavily on both the Sensex and Nifty indices on Tuesday over concerns regarding stress in the financial system.

Shares of private sector lender Yes Bank plummeted over 22 per cent, while RBL, IndusInd Bank, SBI, IDFC First and PNB fell up to 5 per cent on the NSE.