AU Small Finance, Union Bank, IndusInd, HDFC, ICICI, SBI stocks surge after RBI holds rates

Banking Stocks Today: Wednesday happens to be a good day for banking stocks. The Reserve Bank of India decided to keep interest rates unchanged, holding the repo rate at 5.25 per cent. The Monetary Policy Committee, led by Governor Sanjay Malhotra, also maintained a neutral stance.

Nothing has changed for borrowers or banks, which markets like. With rates staying steady, banks don’t have to adjust their lending quickly, and borrowers can continue with their plans without worrying about sudden rate hikes. On top of that, the recent ceasefire in the six-week-long US-Israel-Iran conflict has calmed global nerves, giving investors one more reason to feel confident.

Also read: FOMC March 2026 Review: Fed status quo on rates; 1 cut projected in '26 & '27 each

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Nifty Bank keeps the momentum

The Nifty Bank index had a strong day, rising more than 5 per cent and hitting a fresh high of [insert high] Rs. This is now the fifth straight session of gains, and over the last five days, the index has jumped more than 10 per cent.

AU Small Finance stole the show, climbing over 8 per cent. Union Bank of India wasn’t far behind at 7.82 per cent, and IndusInd Bank rose 6.33 per cent. Even the big names—HDFC Bank, ICICI Bank, and the State Bank of India—had a good day, with gains between 3 per cent and 5 per cent.

Investors seem to be putting their money into banks that are growing steadily and managing their loans and deposits well. Smaller private banks and finance-focused lenders are especially catching attention because they could benefit the most as the economy picks up.

Also read: West Asia Crisis: Don't panic! Essential sectors to be prioritised amid global challenge, says Indian govt

Private banks in focus

Private banks and small finance banks are in a strong position. Loan growth is around 5.5 per cent, and deposits grew about 3.6 per cent last quarter, showing healthy momentum. Public sector banks may face some pressure from trading losses, but private banks look set to perform better.

Among the large banks, Axis Bank, ICICI Bank, and SBI remain top picks. Investors are keeping an eye on guidance for the next fiscal year, as it will give a sense of where banks are headed in 2026-27.

Why investors are excited

So, why all the excitement around banking stocks? It’s simple: rates are steady, global tensions are easing, and banks are seeing steady loan and deposit growth.

AU Small Finance, Union Bank, and IndusInd are leading the charge, while big players like HDFC Bank, ICICI Bank, and SBI are holding strong. If this trend continues, banking shares could remain one of the hottest sectors in the market over the next few weeks.

It’s a mix of calm from the RBI and a sense that the world is slowly stabilizing—enough to get investors excited and keep banks on a winning streak.