Despite rising interest rates, and high inflation, the banking sector is doing well, on the back of a recovering economy. The last couple of quarters indicate credit demand is picking up and Return on Assets (RoA) is more than acceptable at the moment. The PSU bank pack may be more interesting at the moment simply due to being valued at far lower multiples than the private banks.
In terms of index valuations, the Nifty private bank index is at a current price to earnings or PE of slightly over 16 times (x) while the Nifty PSU bank index is at