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MUMBAI: Shares of banks rose on Wednesday after the Reserve Bank of India (RBI) kept repo rate unchanged at 4% while maintaining its accommodative stance in its first by-monthly monetary policy statement of fiscal 2021-22.

Reverse repo rate also stands unchanged at 3.35%.

Private sector banks rose 1.6-4%, led by gains in ICICI Bank, Kotak Mahindra Bank, and Axis Bank.

Among public-sector lender, Union Bank of India, Bank of India, Bank of Baroda, Central Bank of India, and Canara Bank all rose over 3%. State Bank of India was the top gainer on Sensex, rising over 2%

The Nifty Bank index rose nearly 2% at 33,146.75, while the Nifty 50 was up 1.20% at 14,859.95.

The central bank also retained GDP growth forecast for FY22 at 10.5%, and inflation projection at 5% for the fiscal first quarter. For the first half of FY22, inflation is seen at 5.2%, at 4.4% in the December quarter and 5.1% in March quarter of this financial year.

"It is also unanimously decided to continue with the accommodative stance as long as necessary to sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward. The marginal standing facility (MSF) rate and the bank rate remain unchanged at 4.25%," RBI governor Shaktikanta Das said in a statement.

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