Structural deposit pressure off Indian banks; thanks to RBI's liquidity steps: Fitch
RBI's liquidity support, including government securities purchases and a CRR cut, has eased deposit pressures on Indian banks. This intervention has softened funding conditions and lowered deposit costs, providing short-term relief. While net interest margins are expected to shrink in FY26, they should improve in FY27, but the durability of these gains hinges on economic stability and continued policy support.
RBI's liquidity support, including government securities purchases and a CRR cut, has eased deposit pressures on Indian banks. This intervention has softened funding conditions and lowered deposit costs, providing short-term relief. While net interest margins are expected to shrink in FY26, they should improve in FY27, but the durability of these gains hinges on economic stability and continued policy support.
