State-run bank chiefs see credit growth holding firm despite margin pressures
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓State-run bank chiefs expect credit growth to stay strong between 11% and 15% despite rising deposit costs.
- ✓While competition for funds puts pressure on margins, lenders like PNB and Canara Bank see festive demand and retail loans helping.
- ✓They remain confident that asset quality will support growth through FY27.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Livemint
- Reading Speed
- 6 Minute(s)
- Market Focus
- India Economy
The Indian banking sector is navigating a trade-off between protecting profitability and sustaining loan growth, with festive demand expected to provide an additional boost. Together, the six lenders hold deposits of ₹64.5 trillion, which accounts for about 41% of the total public sector bank deposit base of ₹156.3 trillion.
While floating-rate loans are repriced relatively quickly, deposit costs tend to adjust with a lag. Competition for term deposits and the need to sustain funding momentum could weigh on margins in the coming quarters. However, bank managements are not signaling any broad-based slowdown in credit demand, with growth estimates ranging from 11% to 15%.
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