The banking stocks index, Nifty Bank, pared gains after touching an all-time high of 30,000 on Friday, led by lenders such as Axis Bank and Yes Bank.
The NSE's Nifty Bank index rose 0.58 percent to 30,008.10 intraday. At 12:15 PM, the index was 0.48 percent lower at 29,689.15. It has gained nearly 11 percent so far this month.
Stocks such as IDFC First Bank, Axis Bank, Yes Bank and RBL Bank rose between 1 to 1.5 percent.
The gains come as foreign investors continued to invest into Indian equities amid optimism that the current coalition government led by Prime Minister Narendra Modi would return to power after the general election starting next month.
Foreign investors have pumped in $2.43 billion in stocks in March so far, which is the biggest purchase since November 2017.
Investors are also expecting good earnings by banking stocks in the January-March quarter.
In the third quarter, banks reported lower slippages and strong recoveries. After the liquidity crisis in the NBFC sector, banks have benefitted the most, especially private sector lenders and with the lowering of NPAs, banks are regaining momentum.
First Published: IST