Private banks' margins fall as FCNR deposits raise funding costs
Indian markets moved higher in a quarterly results development.
· ET Stocks, Economic Times Markets
In the second quarter, leading private sector banks in India reported a drop in net interest margins. This decline was primarily caused by the costs associated with foreign currency non-resident deposits. Analysts noted that the leveraged nature of these deposits significantly impacted profitability. Additionally, banks faced pressure from faster repricing of assets as interest rates declined.
The analysis
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Market context
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