Indian shares fell on Monday, dragged by financial and energy shares such as Kotak Mahindra Bank and Reliance Industries, while investors were cautious after the central bank announced measures to curb liquidity concerns. The Reserve Bank of India (RBI) decided to buy a total of 360 billion rupees ($4.95 billion) worth government bonds under its open market operations this month. This comes after the RBI eased mandatory cash requirement rules for banks last week.

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However, analysts feel that measures would do little to sway market sentiment. "The RBI measures are not really sufficient to change the sentiment because even though it implies there would be lesser market borrowing, the fiscal deficit target remains the same," said Dhananjay Sinha, head of institutional research at Emkay Global Financial Services.

"This means that the RBI will be looking to tap in other sources, which wont make much of a difference eventually." Kotak Mahindra fell as much as 12.2 percent to its lowest since January on concerns RBI may clamp down on the bank for failing to bring down promoter stake as per regulations.Bandhan Bank Ltd shares plummeted to lowest since their March debut after the RBI put curbs on its branch expansion and froze CEO pay for its failure to bring down main shareholder`s stake to below 40 percent.

The broader NSE Nifty was down 0.67 percent at 10,859.80.10 as of 0650 GMT, while the benchmark BSE Sensex was 0.37 percent lower at 36,091.54. Oil refiner Reliance Industries, down 3.4 percent, contributed to around a third of the Nifty`s loss. Oil prices continued to surge with brent oil hitting a near four-year high. 

Telecom operator Bharti Airtel Ltd hit a 20-month low as the stock broke below a support at 346.6 rupees, technical analysis showed. Among gainers, IL&FS Engineering and Construction Co recovered with a 16.9 percent jump, while those of IL&FS Transportation Networks Ltd rose 9.3 percent.  Television reports said Indian government is moving to take control of Infrastructure Financing and Leasing Services Ltd IL&FS) and has moved the National Company Law Tribunal (NCLT) to remove the company`s board.

IL&FS said on Sunday shareholders approved a plan allowing it to raise fresh funds through debt and equity issuances. Airline stocks took a hit after top refiner and marketer Indian Oil Corp hiked aviation fuel price for domestic airlines in metro cities by 6.8-7.4 pct from Oct. 1. Jet Airways (India) Ltd fell as much as 9.3 percent to a 9-1/2-year low, while Interglobe Aviation Ltd hit its lowest since February 2016. SpiceJet Ltd lost over 6 percent.
($1 = 72.8000 Indian rupees)