Banks recovered from steep falls in the previous session as analysts say the 2013/14 budget was unlikely to have as big a negative impact as investors had first anticipated.
Shares in banks were hit by concerns about liquidity in the banking system after the government announced higher-than-expected borrowing and uncertainty about the impact from allowing private banks to participate in a scheme to provide low cost loans to farmers.
Deutsche Bank says the overall impact of the 2013/14 budget should be limited, given the government's "commitment" towards fiscal consolidation, while Motilal Oswal says the overall measures for the financial sector are largely positive.
State Bank of India (SBI.NS) gains 0.25 percent after dropping 6 percent on Thursday. ICICI Bank Ltd (ICBK.NS) gains 1.7 percent after slumping 3.95 percent in the previous session.