A Banking and Financial Services Fund is a type of mutual fund that invests mostly in companies from the banking, insurance, NBFC (non-banking financial company), fintech, and other financial-related sectors.

These funds aim to capture the potential of India’s expanding financial services market. Whether it’s traditional banks opening new branches or digital platforms offering instant loans, the sector is constantly evolving. By investing in such a fund, you can get exposure to a focused group of companies that are central to the economy.

The Bajaj Finserv Banking and Financial Services Fund comes at a time when India is moving towards potentially becoming the world’s third-largest economy by 2030*, for which this sector is expected to be a key driver. The fund will follow a Megatrends strategy, investing in long-term structural changes that may shape the banking and financial service structure for the next several years. These may include the increased penetration of digital payments, greater financial inclusion, more demand for banking and financial services led by a young workforce and fintech platforms driving innovative ways to access credit and lending solutions.

The New Fund Offer period for the scheme will begin on November 10, 2025 and will be on till November 24, 2025.

*Source: Centre for Economics and Business Research (CEBR).

Why is now a suitable time to invest in banking and financial services

India’s financial sector is seeing increased activity. People and businesses across urban and rural areas are using more loans, insurance, and digital financial services.

Non-banking financial companies (NBFCs) and fintech platforms are also offering new ways to reach customers. With the growth of digital payments and greater formalisation of the economy, more individuals are now part of the organised For instance, as per the Reserve Bank of India’s Financial Inclusion Index*, India’s score stood at 67 for the year ending March 2025, in comparison to 64.2 in March 2024.

Government policies and digital initiatives continue to support the sector’s development.

What types of investors may consider a banking and financial services fund?

A banking and financial services fund may be suitable for investors who understand market cycles, follow sectoral trends and are comfortable with short-term ups and downs for potentially better long-term gains.

It may also appeal to investors who believe in the potential of India’s journey towards financial inclusion through growing rural credit, digital banking, rising insurance coverage and more.

Such a fund may also be considered as a tactical part of a diversified portfolio that also includes broad market funds and debt or hybrid funds.

A long investment horizon of five years or more is generally suitable for such funds.

*Source: 67 and Rising: India’s Financial Inclusion Gains Momentum; Press Information Bureau