Bank stocks gain after RBI’s liquidity push via OMO

The high-beta Nifty Bank index after zooming as much as 524.95 points in early trade on Tuesday (April 29, 2025) pared its early gains in tandem with the benchmark indices. At around 9:54 am, the index was up just 0.28 per cent.

The sharp gains in the pack in early trade were seen after the Reserve Bank of India (RBI) on Monday announced bond purchases to the tune of Rs 1.25 lakh crore in May. According to an official release, the RBI via the open market operation (OMO) route will undertake bond purchase auctions of government securities in four tranches, starting with Rs 50,000 crore worth bonds on May 6 

Here are details of the four tranches, as communicated by the RBI:

The move will support the banking sector’s liquidity in addition to bond yields which have been moving northwards ever since the terror attack in Kashmir.

In addition, today is scheduled the open market operation worth Rs 20,000 crore announced in April.

Anil Singhvi view on banking stocks

Zee Business Managing Editor Anil Singhvi pointed out that this is the fifth open market operation (OMO) announced by the RBI since January 27. OMO – primarily is the monetary policy tool used by the Reserve Bank of India for managing liquidity in the economy. Under the scheme, the RBI engages in buying and selling government securities for determining the amount of money available to banks.

With the latest OMO announcement, the total open market purchases is worth as much as Rs 4.55 lakh crore.

Additionally, he held that continous liquidity push will be very positive for banks.