Bank Nifty is a sectoral index tracking a basket of major Indian banking stocks listed on NSE, unlike broad-market indices like Nifty 50 or Sensex. Banking stocks tend to be sensitive to interest rate decisions and RBI policy, giving Bank Nifty relatively higher volatility — a key reason it’s especially popular among Futures & Options traders.
Related Reading
See the full explanation, including why volatility drives its popularity in F&O, in Stock Market Indices Explained: Nifty 50, Sensex, and Bank Nifty.