Among the banking stocks that saw maximum gains in trade was Yes Bank, which jumped 5.69 per cent, while other banking stocks that rallied were Axis Bank (5 per cent), IndusInd bank (5 per cent), Punjab National Bank (3 per cent) and Kotak Mahindra 2.78 per cent.

Banking stocks have been on fire ever since new RBI Governor, Raghuram Rajan announced a slew of measures to help support the rupee, which has seen a drop in bond yields and higher bond prices.

Dealers say the rally in banking stocks maybe slightly overdone and would have to keep an eye on the RBI's forthcoming credit policy for any further cues.

The RBI is likely to unveil its first policy under new Governor Raghuram Rajan on Sept 20.

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