Bank Nifty rebounds over 600 points from day’s low after RBI cuts CRR; Axis Bank leads gainers

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26 Aug, 2025 12:21

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The Bank Nifty index staged a sharp recovery on Friday, December 6, after the Reserve Bank of India Governor announced a cut in cash reserve ratio in his monetary policy statement. After initially falling when the RBI decided to keep the repo rate unchanged at 6.5 percent, the banking index rebounded strongly, driven by the central bank’s decision to cut the cash reserve ratio (CRR) by 50 basis points to 4 percent.

At 10:30 AM, the Bank Nifty was up 0.5 percent, trading at 53,850, a rebound of over 600 points from its intraday low. The CRR cut is expected to inject Rs 1-1.25 lakh crore into the banking system, providing a liquidity boost to support credit growth, analysts had estimated ahead of the monetary policy announcement.

Banking stocks mixed post-policy

Among the banking sector stocks, gains were led by Axis Bank, which rose 1.5 percent to Rs 1,185. SBI and ICICI Bank also contributed to the recovery, gaining 0.9 percent and 0.8 percent to trade at Rs 873 and Rs 1,344, respectively.

Also read | Morgan Stanley sees Sensex at 93,000 by December 2025 in base case

Meanwhile, heavyweight HDFC Bank and Kotak Mahindra Bank traded flat. HDFC Bank was last seen at Rs 1,863, while Kotak Mahindra Bank stood at Rs 1,776.

Market reaction to RBI policy

The RBI's decision to hold the repo rate steady was largely in line with market expectations, though it initially led to a dip in banking stocks. However, the CRR cut announcement revived investor sentiment, with Nifty and Sensex too turning mildly positive. The CRR cut is expected to bolster liquidity in the banking sector and provide support for economic recovery.

Market participants had been closely monitoring the policy for signs of easing, particularly after an unexpected sharp slowdown in India’s GDP growth in the fiscal second quarter. However, RBI Governor Shaktikanta Das highlighted that price stability and growth are equally important objectives.

The MPC believes that only with durable price stability can we secure a strong foundation for high growth, Governor Das said during the policy announcement.

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