PSU Bank Stocks rally after RBI rate cut; announcement of reduction in CRR from September
By HDFC SKY | Updated at: Jun 10, 2025 01:17 AM IST
Public sector bank stocks saw a strong rally during the market session on June 9, 2025. A key reason for the rally was the Reserve Bank of India’s recent monetary policy announcement aimed at boosting liquidity in the banking system. The Nifty PSU Bank index surged over 2%, trading around 7,210, as investor sentiment improved following the policy announcement.
Key Highlights:
- PSU Bank Index jumps over 2%
- Bank of India gains nearly 4%, Bank of Maharashtra over 3%
- RBI slashes repo rate by 50 bps, CRR cut to inject ₹2.5 lakh crore liquidity
Among the major gainers:
- Bank of India rallied nearly 4%, touching ₹129 per share.
- Bank of Maharashtra climbed over 3%, trading around ₹57.
- Indian Bank and Indian Overseas Bank advanced more than 2% each.
- Punjab National Bank, Canara Bank, Punjab & Sind Bank, Central Bank, and Union Bank of India saw gains exceeding 1%.
- Bank of Baroda, SBI, and UCO Bank also traded with marginal upticks.
A Detailed View Of PSU Bank Stock Market Performance Today
| PSU Bank | Share Price on June 9th | Change (%) | ||
| Bank of India | ₹129.31 | +3.97% | ||
|
₹56.85 | +3.29% | ||
| Indian Bank | ₹651.80 | +2.80% | ||
| Indian Overseas Bank (IOB) | ₹40.53 | +2.28% | ||
| Punjab National Bank (PNB) | ₹112.20 | +1.84% | ||
| Canara Bank | ₹117.69 | +1.72% | ||
| Punjab & Sind Bank | ₹33.26 | +1.66% | ||
| Union Bank of India | ₹155.39 | +1.38% | ||
| Central Bank of India | ₹40.34 | +1.26% | ||
| State Bank of India (SBI) | ₹820.05 | +0.87% | ||
| Bank of Baroda | ₹248.02 | +0.75% | ||
| UCO Bank | ₹33.17 | 0.70% |
RBI Policy Push Fuels Rally
The recent rally in PSU bank stocks was sparked by the RBI’s surprise move on June 6, when it cut the repo rate by 50 basis points to 5.5% — a move that was double what most people expected. Alongside this, the central bank also announced that it would reduce the Cash Reserve Ratio (CRR) in phases, freeing up around ₹2.5 lakh crore to be pumped into the banking system.
RBI Governor Sanjay Malhotra stated that the CRR cut is intended to enhance liquidity and reduce borrowing costs for banks. This, in turn, is expected to slightly lift banks’ profit margins (NIMs) by about 7 basis points.
Broader Market Reaction
Not just PSU banks, but several private lenders also joined the rally. Kotak Mahindra Bank and Axis Bank gained over 2% each, reflecting a broader positive sentiment in the financial sector.
This marks the beginning of a major monetary easing phase in 2025, aimed at making loans cheaper and boosting credit flow. The move is expected to support business activity and provide the overall economy with a much-needed boost in the coming months.
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