The study has examined an impact of macroeconomic variables and dividend yield on Bank NIFTY Index. It analyses the relationship amongst macroeconomic variables and dividend yield. The study used quarterly data from 1st January 2010 to 31st December 2019. It employed statistical measures like regression analysis to analyse the impact of independent variables (macroeconomic factors and dividend yield) on the dependent variable (Bank NIFTY returns) and multicollinearity tests to understand the relationship amongst the independent variables. The observations concluded that GDP, government bond yield and dividend yield have a significant impact on Bank NIFTY returns but, CPI does not have a significant impact on Bank NIFTY returns. We can also conclude that all the independent variables are not correlated to each other. The study suggested to policy makers, in India, that they should maintain economic stability through policies of growth that will eventually boost the banking sector and the economy.
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