At 15:16 IST, the BSE Bankex was up 2.21% at 8461.11. It outperformed the Sensex, which was up 1.75% at 14,915.58.
Punjab National Bank (up 3.75%), Union Bank of India (up 3.22%), Allahabad Bank (up 2.83%), ICICI Bank (up 2.73%), State Bank of India (up 2.73%), Oriental Bank of Commerce (up 2.76%), Axis Bank (up 2.12%), HDFC Bank (up 0.85%), and Kotak Mahindra Bank (up 0.20%), rose.
The BSE Bankex outperformed the market over the past one month till 2 July 2009, rising 1.41% as compared to the Sensex's 1.45% decline. It had also outperformed the market in the past one quarter, spurting 71.66% as against the Sensex rise of 41.64%.
Finance Minister Pranab Mukherjee will present the Union budget on 6 July 2009.
A tax relief on infrastructure lending will enable banks to lend more to the sector. This relief was withdrawn by the government in 2007.
Bankers have also sought rebate for long-term deposits, which are necessary for infrastructure funding.
Banks are also seeking reduction of lock-in period of deposits that attract tax deduction, to three years from five years now. This will help bring it at par with equity-linked savings schemes that get tax deduction for three-year lock-in period.
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