Mumbai, Oct. 6 -- Foreign investors are scaling back their bearish bets on banking stocks ahead of the Reserve Bank of India's (RBI) policy decision on Wednesday, raising the prospect of further gains in the Bank Nifty if the central bank delivers an expected rate hike without any negative surprise.The RBI's rate-setting committee is widely expected to raise the repo rate - at which it lends to banks - by 25 basis points to 5.50% on Wednesday, the first such increase in more than three and a half years, while holding its neutral policy stance. Markets have largely priced in both the rate increase and an unchanged stance, with investors now looking for signs that could support a further rally, experts said.

After net selling incremental B...