Banks rally after RBI eases cash, bond holding rules

MUMBAI (Reuters) - The Bank Nifty surged 5.4 percent in early trade after the Reserve Bank of India eased cash and bond holding rules for banks on Tuesday.

The RBI relaxed rules on mandatory bond holdings for banks, which would help protect lenders from large mark-to-market losses and said it would buy long-dated government bonds worth 80 billion rupees.

State Bank of India Ltd gained 5.5 percent, while ICICI Bank Ltd rose 4.5 percent. (Reporting by Abhishek Vishnoi; Editing by Prateek Chatterjee)