After commencing higher, the 30-share index was up 179.77 points, or 0.73 percent, to trade at 24,864.62 in afternoon trade.
Similarly, the broad-based National Stock Exchange Nifty regained 7,400 mark by rising 54.50 points, or 0.74 percent, to 7,417.00.
Brokers said the RBI's decision to keep key policy rates unchanged and cut the SLR by 0.50 percent to 22.50 percent buoyed the sentiment, triggering buying by funds and retail investors.
The central bank, in its second bi-monthly monetary policy statement for 2014-15, unlocked about Rs 40,000 crore of banking fund by reducing SLR by 0.5 percent to 22.5 percent and left the short-term lending rate or repo rate unchanged at 8 percent, and the cash reserve ratio for banks at 4 percent to keep inflation under check.
The BSE banking index rose 0.39 percent to 17,578.00 with stocks of SBI surging 0.34 percent, Axis Bank 0.78 percent and Yes Bank 0.05 percent.