Banks stare at fall in deposit growth in FY26

With inflation staying below 4% since Feb, most analysts anticipate two more rate cuts in the current calendar year

- DIPAK MONDAL @New Delhi

AFTER posting double-digit growth in FY25, banks are bracing for a slowdown in term deposit growth in the current financial year, as they begin reducing deposit rates. Lower rates make mobilising deposits difficult for banks.

The Reserve Bank (RBI) has cut the repo rate by 50 basis points—25 bps each in the February and April monetary policy reviews—but these cuts have not been fully passed on to depositors. With monthly inflation staying below 4% for three consecutive months since February, most analysts anticipate two more repo rate cuts in the current calendar year.