OREANDA-NEWS. February 05, 2015. Indian shares fell to near two-week lows on Wednesday as lenders declined on concerns that the central bank's decision to keep rates steady while boosting banks' liquidity in a bid to persuade them to lower lending rates would weigh on profit.

The Reserve Bank of India held interest rates steady at 7.75 percent on Tuesday after easing monetary policy just three weeks ago, leaving its next move probably until after the government presents its annual budget at the end of this month.

Rising bad loans at ICICI Bank, Punjab National Bank and Bank of Baroda also led to paring of positions in the sector.

India's GDP and consumer price inflation data due next week are also seen as key for RBI's decision on interest rates post the budget.

"If inflation trajectory remains benign and the government sticks to its fiscal deficit targets, there is a strong chance of further rate cuts by RBI," said Nirakar Pradhan, chief investment officer at Future Generali India Life Insurance.

The benchmark BSE index eased 0.14 percent, while the broader NSE index fell 0.15 percent, after earlier marking their lowest intraday level since Jan. 21.

Banks led the declines with the NSE's bank index down 0.6 percent.

Axis Bank fell 1.2 percent, State Bank of India lost 1.5 percent, while ICICI Bank fell 0.9 percent.

However, oil explorers rose after crude oil price jumped 19 percent over the past four sessions on hopes that prices may have hit a bottom after a seven-month rout slashed oil futures by nearly 60 percent and prompted major energy firms to cut spending on new production.

Cairn India rose 4.9 percent while Reliance Industries gained 0.3 percent

State-run oil explorers also rose on the back of news channel CNBC TV18 report that oil ministry has proposed a new subsidy sharing proposal with the Finance Minister.

Oil and Natural Gas Corp gained 2.2 percent, while Oil India rose 1.7 percent.