The recent sell-off on Dalal Street has send the Nifty Bank tumbling into bear territory thanks to steep hikes in COVID-era interest rates and fears of a recession in the world's largest economy. A stock or index is said to be in the bear zone once it recedes at least 20 percent from its peak. SBI and HDFC Bank are on the edge of bear zone, having performed relatively better then their Nifty Bank peers.

The Nifty Bank — which tracks the performance of SBI, ICICI Bank, HDFC Bank and Kotak Mahindra Bank among 12 major Indian lenders — has retreated 22 percent from its all-time high, scaled in late-October 2021. That even as fundamentals of Indian banks are improving — especially of private lenders.

The banking has fallen more than nine percent in three months alone. The Nifty50 is also on the edge of the bear zone, 18 percent from its peak.

Here's a glimpse into how Nifty Bank constituents have fared during this period:

PSU banks have fared relatively better during this period than their private sector counterparts. That even as they are more susceptible to higher cost of funds because of their much larger exposure to government bonds compared to private lenders.

With the RBI lifting the pandemic-era repo rate — the key rate at which it lends money to commercial banks — by 90 basis points since May 4, banks are likely to scramble to hike their loan rates to protect their margins.

Fundamentally, here's a look at how major lenders have fared in terms of credit growth, margins and bad loans in the past few months:

Yes Securities prefers Axis Bank, SBI, ICICI Bank, Federal Bank and CSB Bank from the banking pocket, in the same order. Axis Bank's market share in credit cards has improved dramatically after a lean 2020, according to the brokerage.