The central bank kept the benchmark repurchase rate unchanged at 4 per cent and maintained an accommodative policy stance to support growth.
The benchmark BSE sensex jumped 460 points or 0.94 per cent to close at 49,662; while the broader NSE Nifty settled 136 points or 0.92 per cent higher at 14,819.
Top gainers in the BSE pack included SBI, M&M, Nestle India, IndusInd Bank, ICICI Bank and Bajaj Auto with their stocks rising 2.18 per cent.
On the NSE platform, all the sub-indices finished in green with Nifty PSU Bank outperforming the index by rising 1.95 per cent.
RBI governor Shaktikanta Das said the Monetary Policy Committee (MPC) kept its estimate for economic growth unchanged at 10.5 per cent for the current fiscal.
“All the announcements made by the RBI, including government borrowing programmes, evolution of the yield curve and long-term bond purchases, are good for the markets,” Saurabh Jain, assistant vice president of research at SMC Global Securities in New Delhi, told news agency Reuters.
“The governor explicitly said that liquidity will not be taken away from the markets, which is also good.”
The bond market has taken the announcement positively with the 10-year yield moving to 6.12 per cent.
On Tuesday, the International Monetary Fund said unprecedented public spending to fight the pandemic would push global growth to 6 per cent this year, while projecting India’s growth rate at 12.5 per cent for 2021.
(With inputs from agencies)