A race that ended level
The Nifty Private Bank index starts in 2016. Counted from its last close of that year, 30 December 2016, the two bank indices have done this.
| 30 Dec 2016 | 5 Oct 2026 | Multiple | Per year | |
|---|---|---|---|---|
| Nifty PSU Bank | 2,982.00 | 8,014.85 | 2.69x | 10.66% |
| Nifty Private Bank | 10,042.80 | 26,718.15 | 2.66x | 10.54% |
These are price returns from NSE's index levels, without dividends. After nearly ten years the two are within 0.1 percentage point a year of each other. The route could hardly have been more different.
Two halves
| End 2016 to end 2020 | End 2020 to end 2025 | |
|---|---|---|
| Nifty Private Bank | +71.8% | +66.5% |
| Nifty PSU Bank | -41.2% | +386.9% |
Through 2020 an investor in private banks was well ahead and PSU banks had lost 41% of their value. Then it turned. From the end of 2020 to the end of 2025 the PSU index rose almost five-fold, from 1,752.70 to 8,533.15, and the private index rose two-thirds.
Year by year
| Year | Nifty Private Bank | Nifty PSU Bank |
|---|---|---|
| 2017 | 40.8% | 24.1% |
| 2018 | 8.1% | -16.6% |
| 2019 | 16.2% | -18.3% |
| 2020 | -2.9% | -30.6% |
| 2021 | 4.6% | 44.4% |
| 2022 | 21.2% | 70.7% |
| 2023 | 13.8% | 32.3% |
| 2024 | -0.4% | 14.5% |
| 2025 | 15.9% | 30.5% |
| 2026 to 5 Oct | -7.0% | -6.1% |
Calendar-year price returns. Private banks won each of 2017 to 2020 and PSU banks each of the six periods since, including this year so far. PSU banks fell in three straight years, 2018 to 2020, by 16.6%, 18.3% and 30.6%. Private banks had two flat-or-down years in nine, both small.
The size of the PSU banks' swings is the point: three falls in a row took the index to 1,752.70 at the end of 2020, and it took 2021 to 2025 to climb back and far beyond.
What each costs now
| 5 Oct 2026 | Nifty PSU Bank | Nifty Private Bank |
|---|---|---|
| P/E | 7.22 | 16.50 |
| P/B | 1.11 | 1.92 |
| Dividend yield | 0.80% | 0.68% |
| Median P/E since Mar 2021 | 8.38 | 17.98 |
| Sessions with a lower P/E (of 1,362) | 191 | 352 |
| Below record close | 18.9% | 8.5% |
PSU banks cost 0.44 times the private banks' P/E and 0.58 times their book value. Their P/B was 0.64 at the end of 2020 and 1.40 at the end of 2025, so most of the 2021 to 2025 gain was the market paying more for the same banks. Private banks' P/B went the other way, from 3.08 to 2.27 and now to 1.92.
Both are near the lower end of their own ranges. PSU banks' record close, 9,879.85, came on 26 February 2026 and private banks' record, 29,187.95, on 18 February, so both indices have fallen from a peak set in the same fortnight.
What this does not tell you
A tie in returns is not a tie in risk. The PSU index had a 41% fall in the first half and a near-five-fold rise in the second. Few holders stayed through both.
These are two baskets. Single names can move either result.
A low P/B is not a floor. PSU banks stood at 0.64 times book at the end of 2020, after the index had already fallen 30.6% in the year.
Price returns leave out dividends.
Where to go from here
Our Nifty Bank P/B post covers the broader bank index and PSU Bank's P/B in August the public sector one. For funds that hold these stocks see banking and financial services fund returns, and use the screener to compare them.
Frequently asked questions
Have PSU banks or private banks returned more since 2016?
Almost exactly the same. From 30 December 2016 to 5 October 2026 the Nifty PSU Bank index rose from 2,982.00 to 8,014.85, 2.69 times or about 10.66% a year, and the Nifty Private Bank index from 10,042.80 to 26,718.15, 2.66 times or about 10.54% a year. These are price returns.
How do PSU bank and private bank valuations compare?
On 5 October 2026 the Nifty PSU Bank index had a P/E of 7.22 and a price-to-book of 1.11. The Nifty Private Bank index had a P/E of 16.50 and a price-to-book of 1.92. PSU banks cost 0.44 times as much on earnings.
Which did better in 2026?
Both fell. Through 5 October 2026 the Nifty PSU Bank index is down 6.1% since 31 December 2025 and the Nifty Private Bank index down 7.0%. The Nifty 50 is down 13.7%.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.
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