Bandhan Banking and PSU Fund-Reg(G)

Scheme Introduction:

Bandhan Banking and PSU Fund-Reg(G) is an open-ended banking & PSU fund designed for investors who want exposure to a debt portfolio that is typically focused on high-quality issuers such as banks, public sector undertakings (PSUs), and public financial institutions. Banking & PSU funds need to invest minimum 80% in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions and Muncipal Bonds. These segments are generally perceived as relatively stronger on credit comfort compared to broader corporate credit, but they can still have interest-rate risk depending on portfolio maturity.

 

As of 1 Feb 2026, Bandhan Banking and PSU Fund-Reg(G) manages 12536 in assets, has a Yield to Maturity (YTM) of 7, and a Modified Duration of 584.

 

In simple terms: YTM indicates the portfolio’s current income potential, while modified duration shows how sensitive the fund is to interest-rate changes (lower is typically more stable for short-term parking).

Investment Objective:

The investment objective of Bandhan Banking and PSU Fund-Reg(G) is to generate reasonable returns by investing in a portfolio of debt instruments of banks, PSUs, public financial institutions, and other debt and money market instruments, in line with banking & PSU fund norms. Investors can typically invest and redeem on business days (subject to scheme cut-off timings and applicable exit load)

 

The current NAV of the scheme is ₹25.41 as on 24 Mar 2026, and the risk level is Moderately Low.

Key Scheme Metrics:

Bandhan Banking and PSU Fund-Reg(G) was launched on 7 Mar 2013 and is benchmarked against NIFTY Banking and PSU Debt Index. The scheme is managed by Suyash Choudhary who has been managing the fund since 28 Jul 2021 and the fund is also managed by Gautam Kaul. The exit load of the fund is NIL.

Asset Type Allocation:

Bandhan Banking and PSU Fund-Reg(G) invests across debt instruments to balance liquidity and yield. As of 28 Feb 2026, the portfolio is allocated to Corporate Debt (68%), Certificate of Deposit (14%), Government Securities (6%), Commercial Paper (2%).

 

A quick way to read this: higher G-Secs/cash typically signals more conservatism and liquidity, while higher bank/PSU bond exposure aims to improve yield, assuming credit quality stays strong.

Rating Allocation:

Credit quality matters the most in banking & PSU bond funds because the strategy is built around perceived higher-quality segments. The fund’s portfolio is allocated 68% to AAA, 16% to A1+, 6% to SOV.

 

In plain language: the higher the share of top-rated and sovereign instruments, the more the fund is leaning toward safety and stability. For Banking & PSU funds, credit quality is the most important filter, because one avoidable credit event can matter more than small return differences.

Top 5 holdings:

The top 5 holdings of the fund are Axis Bank Limited (5.1%), 7.7% HDFC Bank Limited (4.4%), 7.77% National Housing Bank (3.5%), 7.7% Nuclear Power Corporation Of India Limited (3.3%), Canara Bank (2.7%)

 

In Banking & PSU funds, large holdings are commonly bonds or money market instruments issued by banks, PSUs, and public financial institutions, chosen mainly for credit comfort and liquidity management.

Top Sector Allocation:

Sector	Allocation (%)
"Bank	49%
Finance Term Lending	20%
Power Generation/Distribution	10%
G-Sec	6%
Other	6%

 

It is normal for banking & PSU funds to have meaningful exposure to banks and PSU issuers because that is the core mandate of the category.

Performance:

Bandhan Banking and PSU Fund-Reg(G)’s recent annualized returns are 5.8% (1 Year), 6.8% (3 Years) and 5.8% (5 years). Over 1 year, it has delivered 5.8% annualized returns. These returns are as of 25 Mar 2026

 

Against the full Banking & PSU fund peer set, the scheme is ranked 10/20 over 1 year, 13/19 over 3 years, 8/18 over 5 years period.

 

One simple way to interpret rankings: Banking & PSU funds can show meaningful differences across peers because maturity profile and interest-rate positioning can vary from fund to fund, so peer ranking is generally more useful.

How much money would you have made:

If you had invested ₹1,00,000 in Bandhan Banking and PSU Fund-Reg(G) then you would have got:

SIP Invested ₹1,00,000

Duration	Annualized Returns (%)	Current Total Value	Current Total Profit
1 Year	5.8%	₹105800.00	₹5800.00
3 Year	6.8%	₹106800.00	₹6800.00
5 Year	5.8%	₹105800.00	₹5800.00

Note: These are historical returns and they may not repeat in the future.

Also note for very short holding periods, exit load can impact realized returns. Always check exit load before investing in any fund. Data updated as of 25 Mar 2026

Debt quants:

The Potential Risk Class (PRC) matrix of Bandhan Banking and PSU Fund-Reg(G) is A-III which means that the fund has Relatively high interest rate risk and relatively low credit risk.

Who should invest in Banking & PSU Funds?

It may suit investors who want to:

• Invest for a medium-term horizon (for example, 2–5 years)
• Prefer a debt portfolio tilted toward banks/PSUs/public financial institutions, generally considered stronger on credit comfort
• Seek steady accrual and are comfortable with some NAV movement due to interest-rate changes
• Build the “core high-quality debt” allocation of their portfolio rather than very short-term parking.

Benefits of investing in Banking & PSU Funds:

It offers a few practical benefits: professional management of high-quality corporate bonds, easy entry/exit (subject to cut-offs and exit load, if any), and a portfolio that aims to balance stability and yield. It can be useful for short-to-medium term goals, where investors seek steady accrual and are comfortable with some NAV movement due to interest-rate changes.

Things to consider before investing in Banking & PSU Funds:

Banking & PSU Funds are generally positioned as high-quality debt funds, but they are not risk-free. Key things to watch are credit quality (AAA vs AA+ mix), issuer concentration, interest-rate risk (modified duration and average maturity), and changes in YTM over time. Also check exit load and cut-off rules, especially if your holding period could be short. Banking & PSU Funds can show more NAV movement because duration is typically higher, so they are usually better suited for investors with a medium-term horizon rather than short-term parking.

Taxation of Banking & PSU Funds:

For Banking and PSU funds, taxation depends heavily on when you bought your units. Units acquired on or after 1 April 2023 are generally taxed as short-term capital gains at your slab rate and there are no long-term capital gain and loss benefits.

 

For units acquired before 1 April 2023, taxation follows the older capital-gains framework based on holding period and the date of sale.

 

Note that regulatory/tax updates over time can change how long-term treatment works.

Conclusion

Bandhan Banking and PSU Fund-Reg(G) is positioned as a higher-quality debt option that aims to deliver reasonable returns through a portfolio focused on banks, PSUs and public financial institutions, while keeping liquidity available via the open-ended structure.

 

A simple way to track whether it is doing its job is to follow three live indicators: credit quality, peer ranking consistency, and monthly movement in YTM and modified duration. Among these, credit quality should always come first because protecting capital matters more than chasing marginally higher returns; focus on the rating mix (AAA/AA+/sovereign exposure), issuer concentration, and any meaningful shifts in the credit profile, and use returns/ranks mainly as a supporting check