Last Updated:
The banking index Bank Nifty extended its rally on Monday, June 9, touching a fresh lifetime high and crossing the 57,000 mark
Bank Nifty Hits Lifetime High
Bank Nifty Hits Record High: The banking index Bank Nifty extended its rally on Monday, June 9, touching a fresh lifetime high and crossing the 57,000 mark for the first time ever, boosted by the Reserve Bank of India’s surprise move to cut the repo rate by 50 basis points and reduce the CRR. Both PSU and private sector banking indices also posted strong gains.
On Friday, June 6, the RBI’s Monetary Policy Committee slashed the key lending rate by 50 basis points—well beyond market expectations. This follows a 25 basis points cut in April, bringing the repo rate down to 5.5 percent, its second consecutive reduction.
The RBI also announced a phased reduction of the cash reserve ratio (CRR) by 100 basis points, to be implemented in four 25 basis point tranches starting September 6, then on October 4, November 1, and November 29, 2025.
At 9:30 am, the Bank Nifty index was trading at 56,828.75, up 0.44 percent or 250 points, retreating slightly from the 57,000 level. Kotak Mahindra Bank, Canara Bank, and IDFC First Bank were among the top gainers on the index, rising between 1.5 percent and 2.5 percent.
The Nifty Private Bank index rose 0.8 percent to 28,067.95, with RBL Bank, Kotak Mahindra Bank, and Bandhan Bank leading the advance. The Nifty PSU Bank index was the sector’s top performer, climbing 1.2 percent. UCO Bank, Bank of Maharashtra, and Indian Overseas Bank saw the biggest gains, rallying between 3 percent and 4 percent.
Experts had already factored in 100-125 basis points of repo rate easing during the current monetary policy cycle. While the repo rate cut was largely expected, the CRR cut surprised markets, enhancing liquidity and providing a bigger boost to sentiment.
“The CRR cut is expected to support margins. We expect the RBI’s recent measures—including injection of durable liquidity since January 2025, LCR norm relaxation, risk-weight cuts for MFI loans and NBFC loans, cumulative 100-basis point repo rate cut since February 2025, and cumulative 150-basis point CRR cut since December 2024—to boost system loan growth,” said Nomura in a note.
The brokerage added that mid-sized banks such as IndusInd Bank, AU Small Finance Bank, and Federal Bank, as well as deposit-growth-constrained large banks like Axis Bank and HDFC Bank, are expected to benefit most from the CRR reduction.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
- First Published: