The Nifty Bank Index is a crucial market benchmark that represents the performance of the most liquid and large-cap banking stocks listed on the National Stock Exchange (NSE) of India. Designed to reflect the capital market performance of Indian banks, this index is widely used by investors, fund managers, and market intermediaries for benchmarking, investment analysis, and the creation of index-linked products like ETFs, index funds, and structured instruments.
Launched on September 15, 2003, with a base date of January 1, 2000, the Nifty Bank Index had a base value of 1000. It consists of a maximum of 12 banking companies selected based on free-float market capitalisation and liquidity criteria. The index is calculated in real-time using the free-float market capitalisation method and is rebalanced semi-annually to reflect changes in market dynamics.
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The index demonstrates strong correlation with the Nifty 50 and shows a beta of 1.03, indicating a slightly higher volatility than the broader market. Its price return over various periods has remained competitive with long-term averages ranging up to 20.67%. The dividend yield stands at 2.35%, and the price-to-earnings (P/E) ratio is 13.97, reflecting its relatively attractive valuation.
The Nifty Bank Index is dominated by a few major players:
Other important constituents include IndusInd Bank (4.16%), Federal Bank (3.63%), Bank of Baroda (3.49%), IDFC First Bank (3.03%), and AU Small Finance Bank (2.87%).
On May 5, as of 01:28 PM, the Nifty Bank Index is trading at 54,960.95, falling by 153.45 points or 0.28%.
Top gainers in the index included:
On the losing end:
The Nifty Bank Index serves as a vital tool for gauging the health and momentum of India’s banking sector. With its focused composition and methodological transparency, the index continues to be a preferred benchmark for investors tracking the Indian financial landscape. As India’s economy grows, the Nifty Bank Index is expected to remain a key indicator of the strength and performance of the country’s banking industry.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 5, 2025, 1:42 PM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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