The Indian banking Industry has been undergoing major changes, reflecting a number of underlying developments. Advancement in communication and information technology has facilitated growth in internet-banking, ATM Network, Electronic transfer of funds and quick dissemination of information. Structural reforms in the banking sector have improved the health of the banking sector. The reforms recently introduced include the enactment of the Securitization Act to step up loan recoveries, establishment of asset reconstruction companies, initiatives on improving recoveries from Non-performing Assets (NPAs) and change in the basis of income recognition has raised transparency and efficiency in the banking system. Spurt in treasury income and improvement in loan recoveries has helped Indian Banks to record better profitability. In order to have a good benchmark of the Indian banking sector, India Index Service and Product Limited (IISL) has developed the CNX Bank Index.

CNX Bank Index is an index comprised of the most liquid and large capitalised Indian Banking stocks. It provides investors and market intermediaries with a benchmark that captures the capital market performance of Indian Banks.The index will have 12 stocks from the banking sector which trade on the National Stock Exchange.

The total traded value for the last six months of CNX Bank Index stocks is approximately 96.46% of the traded value of the banking sector. CNX Bank Index stocks represent about 87.24% of the total market capitalization of the banking sector as on March 31, 2009.

The total traded value for the last six months of all the CNX Bank Index constituents is approximately 15.26% of the traded value of all stocks on the NSE. CNX Bank Index constituents represent about 7.74% of the total market capitalization as on March 31, 2009.


Methodology

The index is a market capitalization weighted index with base date of January 01, 2000, indexed to a base value of 1000.


Selection Criteria

Selection of the index set is based on the following criteria:

1. Company's market capitalisation rank in the universe should be less than 500



2. Company's turnover rank in the universe should be less than 500



3. Company's trading frequency should be at least 90% in the last six months.



4. Company should have a positive networth.



5. A company which comes out with a IPO will be eligible for inclusion in the index, if it fulfills the normal eligiblity criteria for the index for a 3 month period instead of a 6 month period.

List of CNX Bank Index Stocks  | Daily Values