Five‑Star, RBL, and Bandhan Bank Jump Up to 18% in Two Days After RBI’s Growth-Focused Policy Shift

Shares of Five‑Star Business Finance, RBL Bank, and Bandhan Bank have taken off, rising as much as 18% in just two trading sessions. What’s behind the surge? A major push from the Reserve Bank of India (RBI), which just announced a set of policy moves that aim to fuel growth and inject more liquidity into the financial system.

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RBI Surprises With Aggressive Rate Cuts

On June 6, 2025, the RBI slashed the repo rate by 50 basis points, from 6.00% to 5.50%. That’s not all. The central bank also reduced the cash reserve ratio (CRR) by a full percentage point to 3%. These two steps alone are expected to pour a hefty dose of liquidity into the banking system, making it easier and cheaper for banks and NBFCs to lend.

Although the rate cuts suggest a pro-growth stance, the RBI changed its official policy tone to “neutral”. Translation: They’re trying to spur growth, but they’re still keeping an eye on inflation, global interest rates, and oil prices.

Bank Stocks Rally, Bank Nifty Hits Record High

Markets didn’t waste any time responding. On the day of the announcement, the Sensex soared over 800 points. By June 7, it had climbed another 747 points. The Bank Nifty index, which tracks banking stocks, broke past the 57,000 mark for the first time ever.

Investors saw the RBI’s move as a direct green light for the credit market. Lower interest rates and better liquidity should support both corporate and retail loans. Plus, the changes in risk weight norms make lending, especially to NBFCs and microfinance, less capital-intensive for banks.

Why These Three Stocks Are Leading the Pack

Five‑Star Business Finance jumped nearly 18%. As a microfinance-focused NBFC, lower borrowing costs and more liquidity work in its favour. It can now grow more aggressively while keeping funding expenses in check.

RBL Bank also gained around 15–18%. Its strong connections to NBFCs and the microfinance space position it perfectly to benefit from the RBI’s rollback of stricter capital norms. Analysts expect its capital adequacy to improve, giving the stock a re-rating boost.

Bandhan Bank, which has a large share of microfinance in its loan book, saw a similar 18% rally. This isn’t the first time Bandhan’s gotten a lift from the RBI; earlier risk-weight revisions in February had already helped. Now, with even more easing, the outlook just got brighter.

What the RBI’s Moves Really Mean

Let’s break down the big three changes:

• Repo rate cut: Makes borrowing cheaper across the board.
• CRR cut: Frees up more cash for banks to lend and invest.
• Lower risk weights on NBFC/microfinance lending: Banks don’t need to set aside as much capital, making these loans more attractive.
   

Together, these measures create a friendlier climate for banks and NBFCs, especially those focused on underserved or riskier markets.

Analyst Buzz: Cautious Optimism

Analysts and brokerages quickly revised their ratings post-policy. RBL and Bandhan were top picks, thanks to the improved capital rules. Many experts believe lower funding costs and stronger capital positions will give these banks the green light to lend more aggressively.

That said, some are urging caution. The current rally may already reflect much of the expected benefit; actual quarterly results will be the real test.

The Bigger Picture: Broader Market Joins the Rally

This upbeat sentiment wasn’t limited to a few banks. Financial, real estate, and auto stocks all jumped, sectors that typically do well when interest rates drop and liquidity improves.

By June 9, the Bank Nifty hit a record high of 57,049.50. The Nifty 50 edged closer to 25,000, and the Sensex passed 82,000. Investors are betting on better earnings ahead, especially for rate-sensitive industries.

What’s Next for Five‑Star, RBL, and Bandhan?

All three institutions are well-positioned to benefit from the RBI’s growth-friendly stance. Their focus on high-demand, underbanked markets, combined with easier access to capital, makes them strong candidates for continued upside.

But it’s not just about policy support. To maintain momentum, they’ll need to keep a close watch on asset quality, grow their loan books smartly, and stay profitable in an increasingly competitive market.

Bottom line? The RBI just gave a much-needed boost to banks and NBFCs. While the market is celebrating now, the real challenge lies in execution. If these banks can deliver solid performance, the rally may have plenty of room to run.