The BSE Sensex is down 0.92 percent while the 50-share Nifty is 0.87 percent lower. Domestic shares fall in line with Asian shares that fell on Monday as investors were rattled by a radical bailout plan for Cyprus.

India's sustained food inflation is a negative for the country's sovereign ratings as it exacerbates macroeconomic imbalances, Moody's Investors Service said in a report on Monday.

Private bank shares leading the fall on concerns over money laundering allegations made last week: ICICI Bank (ICBK.NS) shares fall 1.9 percent, Axis Bank (AXBK.NS) is down 2.6 percent.

Coal India Ltd (COAL.NS) shares down 4.6 percent, on a media report that the government was looking to accelerate a 10 percent stake sale in the world's largest coal miner.