Banks like State Bank of India, Corporation Bank, ICICI Banking, Bank of India, Oriental Bank, Dena Bank, Jammu & Kashmir Bank, SBBJ and City Union Bank have gained in the range of 6 per cent to 21 per cent in a couple of trading sessions. Some of the small banks have also been rising especially after the merger of HDFC Bank and Times Bank. The buying interest in the small banking counters is also due to the expectation of many such mergers, according to analysts.

HDFC Bank has gained 54.34 per cent in six trading sessions from Rs 92 on November 25 to Rs 142 on December 12. Although the stock has been mainly zooming on its merger with Times Bank, the government's clearance of the IRDA Bill has further aided the sentiments at this counter.

The banking major, SBI, has gained 6 per cent in two trading sessions from Rs 231 on December 2 to Rs 245 on December 3. Corporation Bank is another major gainer which rose from Rs 115 on December 1 to Rs 126 on December 126, a gain of 9.56 per cent in just three trading sessions. In fact, the stock was range-bound between Rs 110-105 during the period of October 28-November 24.

ICICI Banking is also a noteable gainer on the bourses. From a low of Rs 34.9 on November 26, the stock zoomed by 20 per cent to Rs 41.85 in just five trading sessions. Bank of India, which was receiving the drubbing on the bourses with its mounting NPA problem, increased by 7.8 per cent from Rs 19 on December 1 to Rs 20.5 on December 3. Oriental Bank has gained 11.7 per cent from Rs 41 to Rs 45.8 in five trading sessions. Dena Bank rose by 7.4 per cent in just one trading session from a low Rs 12.8 on December 2 to Rs 13.75 on December 3. The other private sector banks like Jammu & Kashmir Bank (a gain of 13.63 per cent), City Union Bank (9.66 per cent), South Indian Bank (21 per cent) and UTI Bank (15.62 per cent) are also significant gainers on the bourses.

Thanks to the mounting NPAs of the banks and its impact on their bottomlines, most of the banks have been at the receiving end on the boureses. However, with the clearance of the insurance bill, the banks would now be able to enter this mega sector.

Since the banks have large network, they are better equipped to make a foray into the insurance sector, according to an analyst. In fact, they can also have tieups with foreign players who are now allowed to have upto 26 per cent stake in the entity.