Banking funds have fallen 7.77% in the past month. Should you be worried?

A bird flies past the logo of Punjab National Bank installed on the facade of its office in Mumbai, India | Photo: Reuters
The banking sector has been under serious duress due to rising non-performing assets as well as a number of frauds. Though the frauds are largely limited to public sector banks, even private sector banks have taken a hit due to these concerns. For investors, it would not be the right time to make any move, either buy or sell, because there isn’t any clarity on how things will pan out. 
What is the lesson for retail investors?  

Retail investors would do well to invest more in large-cap diversified equity funds (down 4.51 per cent) and only have a small portion of their portfolio in such concentrated schemes.