New Delhi, Bank stocks surged on Tuesday, with IndusInd Bank jumping nearly 7 percent, in line with a rally in the broader market.
Shares of IndusInd Bank rose 6.84 percent, Axis Bank 4.18 percent, HDFC Bank 3.23 percent and ICICI Bank 2.86 percent on the BSE.
Shares of Canara Bank rose 2.40 percent, Yes Bank (2.10 percent), State Bank of India (1.23 percent), Bank of Baroda (1.10 percent), Federal Bank (0.84 percent) and Kotak Mahindra Bank (0.44 percent).
The BSE Bankex index rose 2.51 percent to 59,866.95.
“Banking stocks have benefited from the cut in deposit rates,” said Vinod Nair, Head of Research at Geojit Investments Ltd. Rising for the second consecutive session on Tuesday, the 30-share BSE Sensex jumped 1,577.63 points, or 2.10 percent, to close at 76,734.89. The NSE Nifty rose 500 points, or 2.19 percent, to 23,328.55.
The country’s largest lender State Bank of India (SBI) has cut its lending rate by 25 basis points following the Reserve Bank’s policy rate cut, making loans cheaper for both existing and new borrowers. With the latest round of cuts, SBI’s repo linked lending rate (RLLR) will come down by 25 basis points to 8.25 percent. The cut comes in response to the RBI’s second consecutive rate cut of 25 basis points last week to support growth in the face of the threat of reciprocal tariffs by the US.
In addition, the bank has cut deposit rates by 10-25 basis points, which will again be effective from April 15.
Meanwhile, private sector major HDFC Bank has cut interest rate on savings accounts by 25 basis points to 2.75 percent, the lowest among other private sector banks.
Bank of India, another public sector bank, has withdrawn its 400-day special deposit scheme, which offered 7.3 percent interest. Mumbai-based Bank of India has announced a 25 basis point cut in its home loan interest rates, benefiting both new and existing customers.
