What is Bank Nifty Index?
Bank Nifty index also known as “Nifty Bank” was launched in the year 2000 by India Index Service and Product Limited (IISL). 1st January, 2000 is the base date of the Bank Nifty index with base value of 1000 points.
Bank Nifty is a weighted index of Indian banking stock companies which are largely capitalised and fairly liquid. Bank Nifty consists portfolio of 12 Indian Banking companies which are from both Private Sector Banks and Public Sector Banks.
Bank Nifty or Nifty Bank is computed on the basis of free-float capitalisation method. Bank Nifty is frequently traded in both future and options market.
For trading in Nifty Bank, the minimum lot size is 25 units. Bank Nifty was the first index which was traded weekly in options market and which is now having giver trading value than the nifty index.
Selection of Stocks for inclusion in Bank Nifty.
NSE has set up required criteria for including or selection of the banking stocks in Nifty Bank Stocks index.
Market Capitalisation Rank: The selected bank should have market capitalisation rank below 500.
Turnover Rank: The selected bank should have turnover rank rank below 500.
Trading Frequency: The trading frequency of the selected bank should be minimum of 90% in the last six months.
Net Worth: NetWorth of selected bank should be positive.
Futures & Options Segment: The bank will be included in Bank Nifty only if it is traded in F&O (Futures & Options Segment).
A bank company will be included in the bank nifty index only if it is traded in F&O (Futures & Options Segment).
Nifty Bank index is governed by three-tier teams.
- Board of Directors of NSE Indices Limited.
- The Index Advisory Committee (Equity).
- The Index Maintenance Sub-committee.
Bank Nifty or Nifty Bank Index Stocks company weightage 2021
Below are the list of companies which are included in Bank Nifty / Nifty Bank stock companies weightage 2021 released by NSE India on June 30,2021
- HDFC Bank – 28.78%
- ICICI Bank – 21.06%
- Kotak Mahindra Bank – 12.07%
- Axis Bank – 12.06%
- State Bank of India (SBI) – 12.00%
- IndusInd Bank – 5.36%
- AU Small Finance Bank Ltd. – 1.98%
- Bandhan Bank – 1.95%
- Federal Bank – 1.52%
- IDFC First Bank Ltd. – 1.26%
- Punjab National Bank (PNB)- 1.10%
- RBL Bank – 0.86%
HDFC Bank holds the highest weightage in Nifty Bank of 28.78%, and ICICI Bank holds the second position with 21.06% . Kotak Mahindra Bank holds third position with 12.07%. HDFC Bank, ICICI Bank and Kotak Mahindra Bank holds 62% of the Bank Nifty stock weightage.
RBL Bank has the least weightage in Bank Nifty Index with 0.86%
Bank of Baroda has been removed and AU Small Finance Bank Ltd has been included into the Bank Nifty Index as per the weightage re-balancing on 31st March 2021. Similarly Yes Bank has been excluded from Nifty Bank by Bandhan Bank on 19th March 2020.