I am a second year phd student. I was previously working in the industry for 9 years and forgot a lot of the basic knowledge in my field. Since my job was stressful and time consuming, I was unable to really study and brush up my basics properly before getting into phd. Right now, my research is also taking a lot of time and I am facing the same problem. Some of my friends tell me to just study whatever is immediately required for my research and move forward. Which approach is better? To study everything thoroughly somehow or to just study what is immediately required. Also how many hours do you guys put to update your knowledge and how do you manage to do it?

You can put studying what is required immediately as a priority while spending (at least) two hours a day in refreshing the fundamentals. In my field, I found that the fundamentals are almost everything. In industry interviews, I was only asked about the fundamentals. Also having solid theoritical background would help in presentations and viva and improve your image in front of colleagues.

In my opinion the basics are really crucial. Very often knowledge of basics can make you extract data out of some results you would have binned otherwise. eng77 suggestion is spot on. I would suggest to read one comprehensive textbook in your field. that would provide you with a solid base you can build upon.