New SEBI rules for the Nifty Bank 

The Securities and Exchange Board of India (SEBI) has issued a circular introducing new eligibility criteria affecting the Nifty Bank index. The rules set staggered deadlines for derivative eligibility and offer relief from the May 29 directive. Under the new guidelines, the weight of the top constituents in an index will be capped at 20% instead of 33%, while the combined weight of the top three cannot exceed 45%, down from 62%. This will gradually reduce the weight of HDFC Bank, ICICI Bank, and SBI, the current top three in Nifty Bank.

Additionally, all non-benchmark indices with derivatives trading must have at least 14 stocks; Nifty Bank currently has 12. This opens the door for Yes Bank, Indian Bank, Union Bank, and Bank of India to join the index. Adjustments will occur in four tranches by March 31, 2026, starting in December 2025.

Research from Nuvama estimates that inclusion could trigger inflows of $104.7 million for Yes Bank and $72.3 million for Indian Bank, with all four potential additions collectively attracting substantial capital. Following the announcement, Union Bank shares rose 4.4%, while Bank of India, Indian Bank, and Yes Bank gained 1.5–2.5%.