Nifty PSU Bank Index Hits New High, Jumps 27% in 3 Months: Here’s What’s Powering PSBs

Public sector bank stocks continued their strong rally on November 26. The Nifty PSU Bank index reached a new high of 8,665.70, up 2% intraday.

The index is up 4% in just 2 days and has surged 27% in the last 3 months, far ahead of the Nifty 50’s 5.6% rise during the same period.

Strong Gains Across Major PSBs

Several state-owned banks hit new highs:

• SBI rose 1% to a fresh high of ₹999
• Bank of India and Canara Bank gained around 3%
• Other PSBs like PNB, Indian Bank, Union Bank, Bank of Baroda, UCO Bank, and Central Bank gained 2–3%

The broad-based rally shows strong investor interest across the entire PSU banking space.

Why Are PSU Banks Rising?

PSBs Gain Market Share in Home Loans

A recent CRIF High Mark report shows that public sector banks now hold 50% of all home loan originations by value as of September.

This means PSBs have overtaken private banks in the housing loan segment, one of the most profitable lending categories.

Better Asset Quality Trends

Overdue consumer loans (31–180 days) improved to 3% in September, down from 3.3% last year.

Cleaner books and disciplined lending are boosting investor confidence.

Private Banks Losing Momentum

Loan growth at private banks slowed to 8.9% in FY25 and 9.9% in H1FY26, trailing the 11–12% growth of the overall banking system.

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Supportive Policy Outlook

RBI Governor Sanjay Malhotra signalled room for possible rate cuts in upcoming MPC meetings. 

What This Means for Investors

The strong financial performance, improving loan quality, and regained dominance in home loans have made PSU banks attractive again.

Conclusion

The Nifty PSU Bank index hitting a new high reflects renewed confidence in public sector banks. With rising home loan market share, better asset quality, and supportive economic signals, PSBs have outperformed sharply, and the momentum may continue if credit growth and policy conditions remain favourable.

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