Rate sensitive stocks continued trading in the green as RBI's monetary policy committee (MPC) held the repo rate at 4 percent in the April policy and retained its 'accommodative' stance which could continue for as long as necessary to revive growth.

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Nifty Bank, Nifty Auto and Nifty Realty surged over 1 percent each after the policy announcement.

The central bank retained India's FY22 real GDP growth projection at 10.5 percent. The MPC had projected this during the previous policy announcement.

RBI expects CPI inflation to be at 5.2 percent in Q1FY22, 5.2 percent in Q2 FY22, 4.4 percent in Q3 FY22, and 5.1 percent in Q4 FY22.

"The monetary policy announcement is on expected lines without changes in policy rates and stance. However, reading between the lines, one can conclude that the stance is more dovish than expected with the governor reinforcing the central bank's commitment "to remain accommodative to support & nurture the recovery as long as necessary," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The Nifty Bank index rose 1 percent with Bandhan Bank, IDFC First Bank, SBI, PNB, IndusInd Bank up between 1.5 percent and 3 percent after the announcement.

Meanwhile, the auto index advanced 1.3 percent. Among stocks, Ashok Leyland rose 3.5 percent while Motherson Sumi, Maruti, Hero Moto, Bosch and Eicher Motors were up over 1.5 percent each.

Among the realty names, Indiabulls Real Estate, Sobha, DLF, Brigade, and Godrej Properties rose between 1 and 3.5 percent each.

The bank further announced to provide additional liquidity support of Rs 50,000 crore for fresh lending in 2021 to financial institutions.

Catch updates from the RBI Policy meet here