Why Banking Stocks Are Soaring After RBI’s Policy Update

Banking stocks surged despite the RBI holding its repo rate steady at 6.5%. Two key factors drove this rise: a reduction in the Cash Reserve Ratio (CRR) by 50 basis points, injecting ₹1.16 lakh crore liquidity, and increased interest rate ceilings for FCNR-B deposits, attracting foreign capital inflows. These measures aim to boost liquidity, stabilize the rupee, and strengthen India’s financial position. With positive market sentiment and liquidity support, banking stocks like ICICI Bank and SBI led the rally.