Lenders were boosted after the central bank relaxed the provisioning norms for banks, a move that could help banks post higher profits.
Sector leader State Bank of India rose 2.4 percent, helped also by brokerage upgrades. JPMorgan raised the stock to overweight from neutral, while Deutsche Bank changed to buy from hold.
Rivals ICICI Bank and rose 0.1 percent and 0.2 percent respectively.
Reliance Industries, which has the heaviest weight on the main index, was down 2.3 percent after its quarterly result failed to meet street expectations due to flat production from gas blocks and lower-than-expected refining margins.
At 10:16 a.m. (0446 GMT), the 30-share BSE index was up 0.3 percent at 19,661.95 points, with 18 components advancing. It had started lower.
"Banks saved the market today as relaxation of provisioning norms helped. It could have been worse otherwise with Reliance coming off," said Ambareesh Baliga, chief operating officer at Way2Wealth Securities.
The 50-share NSE index was up 0.3 percent at 5,899.35. Around 61 million shares were traded on the NSE, with the gainers outnumbering losers in the ratio of 1.6 to 1.
"Investors could use this spike to book profits, as there are no solid triggers around," Baliga said.
The BSE index has gained more than 10 percent since the start of March, driven by net foreign portfolio investments of around $3.5 billion.
Foreign funds returned to investing in Indian equities, after being net sellers in January and February.
Leading car maker Maruti Suzuki was down 1.1 percent ahead of its quarterly result. Net profit for the March quarter is expected to have dropped 8 percent from a year before, according to a Reuters poll.
Top software firm Tata Consultancy Services was down 0.5 percent at 1,186.10 rupees, after Credit Suisse downgraded the company to "neutral" from "outperform", saying all positives were priced in.
Jindal Steel and Power was down 1.3 percent at 686.45 rupees after it reported March quarter consolidated net profit at 10 billion rupees, almost unchanged from a year ago.