HDFC, SBI, and ICICI Bank..., why banking stocks are running at a fast pace today

IDFC First Bank and State Bank of India (SBI) were also trading above 2 percent, while the Nifty banking index was up 2.39 percent at around 10:35 am.

The Indian stock market witnessed a tremendous rise on Tuesday and especially the shares of the banking sector saw a great jump. These shares saw a jump of about 6 percent after the announcement of a reduction in interest rates on borrowing by many banks. The bank has made this change in its lending interest rates after the Reserve Bank of India (RBI) cut the repo rate by 25 basis points to 6 percent.

IndusInd Bank shares rose 6 percent on the National Stock Exchange, while HDFC Bank shares rose 3.3 percent, Axis Bank rose about 3 percent and ICICI Bank rose 2.3 percent.

IDFC First Bank and State Bank of India (SBI) were also trading above 2 percent, while the Nifty banking index was up 2.39 percent at around 10.35 am.

Deposit rate cut

HDFC, Yes Bank, and Bank of India have announced a cut in interest rates on deposits. This means that now investors will get relatively less interest on their small deposits. This rate cut is an effort by the bank to remain competitive. However, the step has been taken in line with the RBI's decision.

On the other hand, amid global uncertainties, the aim of RBI's policy decision is to maintain economic growth at the present time. However, the bank has projected the situation to remain normal in terms of inflation till next year.

Along with this, banks have also cut the rate for lending, after which the loan from the bank will become cheaper than before. SBI, Bank of India and Bank of Maharashtra have cut the lending lending rate by 25 basis points.

Today's boom in the banking sector is a result of RBI's change in its stance on growth, which is an indication that the central bank is constantly trying to accelerate the economy.