The Sensex ended the day higher by 490 points, while the Nifty ended with gains of 152 points.
The S&P BSE Bankex index was up 403.45 points or 2.8% . HDFC Bank was up 3.78%, ICICI Bank was up 3.83%, SBI rallied 4.20% and PNB was higher by 7.61%.
Shares of Tata Motors were up over 3.5% after its unit Jaguar Land Rover Ltd reported a 12% increase in sales in April.
Among the sectoral indices all the sectors were trading in positive terrain. IT, TECk, Consumer Durables leading the rally.
The benchmark Sensex touched a high of 20,226 points and low of 19,798.18 points in the trade.
The only losers in today's trade were Power Grid, Cairn India and Ultratech Cement. Among major gainers, L&T, Mahindra and Mahindra, Maruti Suzuki, ONGC, Bajaj Auto, Cipla, Bharti Airtel and Dr Reddy's lab advanced on investment buying.