Treasury income under pressure for banks in Q3

Yields across tenures remain elevated despite repo rate cut by RBI and liquidity infusion

- ANJALI KUMARI & ANUPREKSHA JAIN

Banks are unlikely to book any treasury gains during the third quarter (October-December) of the current financial year (2025-26/FY26), as government bond yields across tenors remained elevated despite the Reserve Bank of India’s (RBI's) policy repo rate cut and liquidity infusion.

While the yield on the benchmark 10-year government bond rose marginally by 1 basis point (bp) during the quarter, yields on five-year and 15-year government bonds hardened by 11 bps. The three-year bond yield rose by 14 bps, and the yield on the 30-year bond increased by 6 bps over the same period.