Banking stocks end with gains after RBI leaves benchmark lending rate unchanged

Banking sector stocks on Thursday ended in green after the central bank’s monetary policy committee decided to keep the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance.

Barring Bank of Baroda, shares of all other lenders in the S&P BSE BANKEX index ended with gains.

The highest gainer was Federal Bank Ltd, which rallied 2.2 per cent to end at Rs 104.4.

HDFC Bank jumped 1.77 per cent, Kotak Mahindra Bank was up 1.6 per cent and State Bank of India ended the day with 0.99 per cent gain.

Also, AU Small Finance Bank Ltd closed the counter with 0.76 per cent gain, Axis Bank went up by 0.73 per cent, IndusInd Bank 0.55 per cent, ICICI Bank 0.32 per cent and Bandhan Bank 0.03 per cent. On the other hand, Bank of Baroda was the lone loser with its shares sliding 0.09 per cent to Rs 114.75.

S&P BSE BANKEX ended 1.07 per cent higher at 44,683.73.

The Reserve Bank of India (RBI) on Thursday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance in the backdrop of an elevated level of inflation.

This is the 10th time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained the status quo.

Besides, the reverse repo also remains unchanged at 3.35 per cent.

The six-member MPC, which has been on pause since August 2020, voted unanimously to maintain the status quo on the repo rate and by a majority of 5-1 to retain the accommodative policy stance as long as necessary, he said.