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NIMs stable, liquidity challenge looms
Business Standard
|January 06, 2026
‘The past year was marked by large foreign investment in the banking sector, policy rate cuts by the Reserve Bank of India (RBI) that compressed banks’ margins, stress in the microfinance segment, and muted credit growth.
For 2026, however, the outlook appears more optimistic, with expectations of a revival in credit growth, easing margin pressures, benign asset quality conditions, and a likely increase in sector investments, experts said.
One potential concern is a slowdown in deposit growth due to lower interest rates on such products and the rising appeal of alternative asset classes. This could push banks to rely more on capital markets to support credit growth, experts added, observing that liquidity in the system will remain a key monitorable.
This story is from the January 06, 2026 edition of Business Standard.
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