At about 9.30 am, the Sensex was up 156.25 points or 0.47 per cent at 33,105.46 while the NSE Nifty rose 0.48 per cent or 48.95 points to 10,215.65.
The central bank kept the economic growth forecast unchanged at 6.7 percent for the fiscal ending March 31.
The Sensex touched a high of 32,992.45 points and a low of 32,598.12 during the intra-day trade.
The wider Nifty hit a low of 10,033.35 before finishing at 10,044.10, down 74.15 points or 0.73 percent.
The benchmark BSE Sensex and the broad-based NSE Nifty continued its rally on Friday morning.
All the BSE sectoral indices led by Telecom (+4.8%), consumer durables (+2.49%), capital goods (+2.1%), power (+2.1%), Realty (+2.06%), Auto (+1.9%), metal (+1.8%) and oil and gas (+1.17%), were trading in the green.
The market breadth was in favour of the declines on Monday afternoon with 782 stocks advancing as against 868 declines.
The 30-share sensitive index had lost 205 points on Wednesday following the Reserve Bank's decision to hold interest rates. DIIs had bought shares worth Rs 995.11 crore, while foreign funds sold shares to the tune of Rs 1,217.92 crore yesterday, the provisional exchange data showed.
Gainers on the Sensex included: ICICI Bank, Maruti and HDFC.
The broader market depicted a mixed trend, with the BSE mid-cap ending up 0.41 per cent, while small-cap index finished 0.03 per cent down.
Japan's Nikkei was up 1.22 per cent while Hong Kong's Hang Seng rose 0.57 per cent in early trade today.
Other losers, apart from bank stocks, were ONGC, L&T, Tata Motors, M&M, Tata Steel, Bharti Airtel, ITC Ltd, NTPC, Dr Reddy's, Hero MotoCorp, Asian Paint, Adani Ports, Cipla, Wipro, TCS and Lupin.
In the Eurozone, key indices such as Paris CAC 40 and Frankfurt's DAX Performance Index were up by 0.32% and 0.55% in their early deals.