Shares of banking licence applicants today surged as much as 12.5 per cent after the Election Commission allowed the Reserve Bank to issue licences for setting up new banks.

JM Financial’s scrip soared 12.45 per cent, while IFCI rose by 4.74 per cent, IDFC was up 3.86 per cent and Reliance Capital gained 3.85 per cent on the BSE.

Among others, LIC Housing Finance was up 3.55 per cent, L&T Finance Holdings rose by 2.59 per cent, SREI Infrastructure Finance (2.43 per cent) and Muthoot Finance (1.07 per cent).

The approval came after the RBI missed the March-end deadline for issuing the first bank licence in almost a decade.

The RBI on March 12 approached the Election Commission (EC) seeking its approval for granting bank licences as the model code of conduct had come in place after the general elections announcement on March 5.

Public sector India Post and IFCI and private sector Anil Ambani group and Aditya Birla group were among the 25 players in the fray. Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital have also applied.