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Indian state-run lenders have told senior government officials they expect to raise nearly $30 billion through the central bank's subsidised dollar deposit window, five bankers familiar with the matter told Reuters. The estimate was shared by the heads of state-run banks at a meeting with Finance Minister Nirmala Sitharaman and other finance ministry officials earlier this week, two of the sources said.
MUMBAI: RBI has barred defaulting borrowers from buying back properties acquired by lenders to satisfy a defaulter's debt, tightening norms for resolution of stressed accounts under its new directions effective Oct 1, 2026. Defaulters and their related parties, as defined under the Insolvency and Bankruptcy Code, 2016, cannot repurchase such assets from any type of bank or finance company. The restriction applies even if the asset is reclassified or used by the lender later.
HDFC Bank on Wednesday said it has received approval from the Reserve Bank of India (RBI) to appoint former Financial Services Secretary, Rajiv Kumar as its part-time chairman for a three-year term, effective July 15, 2026. The appointment has been approved under Section 10B(1A)(i) of the Banking Regulation Act, 1949, the bank said in a stock exchange filing. Rajiv Kumar's appointment follows the bank's application to the RBI and an earlier intimation made on June 29. The bank also thanked Keki Mistry for his guidance and contributions during his tenure as interim part-time chairman. Mistry will continue to serve as a non-executive, non-independent director on HDFC Bank's board.
The Reserve Bank of India (RBI) on Tuesday overhauled the framework governing matters to be placed before bank boards, replacing the existing seven-theme structure with a principle-based approach aimed at allowing directors to spend more time on strategic priorities and risk oversight. The revised directions will come into effect from October 1, with the central bank extending the implementation timeline by a month following feedback from stakeholders. The draft guidelines were issued on April 8.
The foreign currency non-resident (bank), or FCNR(B), deposit scheme, launched to support the rupee and bridge the balance of payments deficit, is also expected to ease banks’ funding pressures amid sluggish deposit growth. Many lenders have, therefore, aggressively priced these deposits, with some offering rates higher than those on comparable domestic deposits.
Indian companies' proposals to raise money from foreign sources under the external commercial borrowings (ECB) route witnessed a month-on-month jump of 25.8 per cent in May at USD 4.74 billion, the Reserve Bank said on Tuesday. In April, total ECB filings were down by 30.69 per cent month-on-month. According to the RBI's data, total ECB filings stood at USD 4.74 billion in May 2026, as compared to USD 3.77 billion in April 2026. The entire intent was from the general permission, and special permissions remain 'nil' in the reporting month.
Public sector banks earned higher commissions from selling insurance products in FY26, with most lenders reporting growth through this activity. However, income from mutual fund distributions was mixed, with some banks reporting higher earnings while others saw declines. An analysis of annual reports of banks by PTI showed that the country's largest lender, State Bank of India (SBI), continued to dominate the segment, earning Rs 2,795.01 crore in insurance commission during FY26, up 19.26 per cent from Rs 2,345.36 crore in the previous financial year.
Retail stress continues to build up on banks’ books, with lenders putting up about Rs 15,000 crore of fresh non-performing assets (NPAs) for sale to asset reconstruction companies (ARCs) in the quarter ended June. The bulk of the fresh NPAs came from the retail segment, while about one-fifth comprised loans to smaller corporate accounts, such as micro, small, and medium enterprises. Including these new additions, the total stock of bad loans currently available for acquisition by ARCs stood at Rs 50,000 crore.
India is close to accepting an offer from Fairfax Financial Holdings Ltd. for IDBI Bank Ltd., possibly at a slightly higher price, according to people with knowledge of the matter, in what could potentially be the biggest foreign investment in the country’s banking sector. Fairfax, whose earlier bid for IDBI Bank failed to meet the government’s reserve price, is considering increasing its offer by a few rupees per share, the people said, asking not to be identified as the deliberations are private. They declined to share specifics.
Kotak Mahindra Bank will keep exploring acquisitions alongside organic growth to expand its business, managing director and chief executive officer Ashok Vaswani said in the bank's annual report. "While our primary focus remains on organic growth, we will continue to pursue inorganic opportunities that enhance scale, capabilities or customer reach, as evidenced by our recent acquisition of Deutsche Bank’s retail portfolio," Vaswani said in his message to shareholders. Last month, the lender signed a definitive agreement to acquire Deutsche Bank's retail, private banking and wealth management business in India for Rs 282 crore. The acquisition is expected to strengthen Kotak Mahindra Bank's presence in the affluent banking segment and grow its small business lending portfolio. Vaswani said the bank, with a consolidated balance sheet of more than Rs 10 lakh crore, will also be looking to tap the business opportunities coming with the country's economic expansion.
State-owned Punjab & Sind Bank on Wednesday said it has received the licence from the International Financial Services Centres Authority (IFSCA) to establish an IFSC Banking Unit (IBU) at GIFT City, Gandhinagar. This marks a step in the bank's journey towards expanding its international banking presence and offering world-class offshore banking services, Punjab & Sind Bank said in a statement. The IBU will cater to the financing needs of corporate, financial institutions, importers and global investors through a range of foreign currency banking, trade finance, and other international financial services, it said.
Robust credit growth of 17.7% in the first quarter — the highest in nearly two years — along with strong treasury gains and stable asset quality is expected to support banks’ profitability. However, pressure on net interest margins (NIMs) is likely to persist as much of the incremental lending has been funded through high-cost retail and bulk deposits. “Most of the incremental bank credit growth has come from corporate credit, gold loans and NBFC lending, all lower-yielding segments, pointing to a NIM trade-off,” Nomura said in a report.
Three years after the Reserve Bank of India (RBI) introduced the green deposits framework, the product remains a tiny fraction of the banking system, raising questions over whether the additional compliance burden is worth the effort for banks and depositors. Green deposits are fixed deposits whose proceeds can be deployed only towards environmentally sustainable projects such as renewable energy, electric mobility, green buildings and water management.
The non-life insurance industry reported gross direct premium income of ₹27,145 crore in June, up 17% from ₹23,265 crore in the same month last year. The industry comprises public and private sector general insurers, standalone health insurers, and specialised public sector insurers. Standalone health insurers recorded the fastest growth among all segments, with gross direct premium rising 31% year-on-year to ₹4,373 crore. The segment comprises seven insurers, including Star Health, Niva Bupa and Aditya Birla Health Insurance. Last week, the Insurance Regulatory and Development Authority of India approved Prudential HCL Health Insurance, taking the number of standalone health insurers to eight.
Large companies are returning to banks for funding as private-sector capital expenditure gathers pace and rising commercial paper (CP) rates make bank loans more attractive. Bank credit outstanding to large corporates jumped 14.4% year-on-year to Rs 31.10 lakh crore as of May 31, 2026, according to the Reserve Bank of India’s latest sectoral deployment of credit data. A year earlier, growth in this segment was just 1.5%.
Private sector banks far outpaced public sector peers on deposit mobilisation in the June quarter, with a 3.6-percentage point gap between the two, showed proforma numbers issued by 15 private and nine state-run lenders. Private banks grew deposits 14.3% year-on-year during the period, ahead of a 10.7% increase by public sector banks (PSBs), underscoring the former’s continued structural advantage in attracting liabilities.
HSBC is pulling back from riskier private credit lending, becoming the latest bank to rein in exposure to the sector after a string of high-profile bankruptcies raised concerns over underwriting standards, the Financial Times reported on Tuesday. The bank has told some clients it will not renew their lending facilities after deciding to stop lending to private credit funds that did not offer sufficient returns to justify the risk, the report, citing three people familiar with the matter, said.
Private sector banks wrote off about half of their bad loans in 2025-26 to cleanse the balance sheet primarily targeting the unrecovered unsecured loan exposure in the microfinance and consumer credit segments, people aware said. The Reserve Bank of India's financial stability report showed that the write-off ratio relative to non-performing assets for private banks was more than double that for public sector banks, although state-owned lenders accounted for 63.2% of the total bad loans.
Private sector banks far outpaced public sector peers on deposit mobilisation in the June quarter, with a 3.6-percentage point gap between the two, showed proforma numbers issued by 15 private and nine state-run lenders. Private banks grew deposits 14.3% year-on-year during the period, ahead of a 10.7% increase by public sector banks (PSBs), underscoring the former’s continued structural advantage in attracting liabilities.
A cooperative life insurance company will be established to strengthen the cooperative movement and widen access to insurance services across the country, Home and Cooperation Minister Amit Shah announced on Monday. The initiative will build on the success of Bharat Taxi, a cooperative transport platform that is set to expand to 500 cities over the next two years, he said. The announcement comes at a time when the insurance sector is undergoing major reforms. The government has raised the foreign direct investment limit in insurance providers to 100% under the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. It also removed the 18% GST on individual life and health insurance policies from September 22, 2025, reducing premium costs.
Indian lenders are pulling back short-term debt sales as the central bank’s recent push to attract foreign-currency deposits has opened up a cheaper and more durable source of funding. Banks haven’t issued any certificates of deposit — debt instruments maturing within one year — in the three trading sessions through July 2, according to data from The Clearing Corp. of India Ltd. The pause follows a decline in issuance, with banks raising 708 billion rupees ($7.4 billion) between June 16 and June 29, down from about one trillion rupees raised in the first half of the month.
Bank lending accelerated in the April-June quarter of FY27, but deposit mobilisation continued to trail credit growth, widening the funding gap across the banking system and highlighting mounting pressure on banks' liability franchises, according to business updates reported by The Times of India. While several lenders posted strong double-digit growth in advances during the quarter ended June 2026, deposit growth remained subdued, with some banks even reporting sequential declines in deposits. Analysts warned that the widening gap between loans and deposits has pushed the banking system's loan-to-deposit ratio to one of its highest levels in more than a decade, raising concerns over funding sustainability.
State Bank of India (SBI) is targeting Rs 1.20 lakh crore in fresh home loan disbursements during the current financial year, aiming to increase its market share by one percentage point in one of the fastest-growing retail lending segments. With the planned addition, the country’s largest lender expects its home loan portfolio to rise to Rs 10.64 lakh crore by the end of FY27 from Rs 9.44 lakh crore as of March 31, 2026. “The bank’s retail loans, including housing and non-housing, grew about 15% in FY26 over the previous year, and we are seeing strong demand in the current fiscal as well. We are projecting to increase our home loan book by Rs 1.20 lakh crore in FY27,” said SBI Managing Director Rama Mohan Rao Amara, who oversees the bank’s retail business.
India's private credit market is rapidly moving into the mainstream as companies increasingly bypass traditional bank loans for large and customised financing, with Moody's Ratings saying the asset class is poised for sustained growth as funding needs rise in the country's expanding economy. In a report published Thursday the ratings agency said private credit has doubled in size over the past five years to about $25 billion in assets under management (AUM) by the end of 2025 and has evolved from a niche source of funding for distressed companies into an important financing avenue for healthy businesses seeking capital for expansion, acquisitions and refinancing.
The Jammu and Kashmir Bank on Thursday said its total business has crossed the Rs 3 trillion mark in the first quarter of this fiscal, driven by over 16 per cent growth in deposits and more than 25 per cent growth in gross advances. The Bank has registered total business of Rs 3.04 trillion, (Rs 1.73 trillion in deposits and Rs 1.31 trillion in gross advances) with an year-on-year growth of over 20 per cent backed by healthy increase of over 16 per cent in deposits and over 25 per cent in gross advances, a spokesman of the bank said on Thursday.
Public sector banks (PSBs) are raising fresh term deposit rates, even as private sector peers pare theirs, in a bid to arrest a decade-long erosion in their share of the deposit market, showed Reserve Bank of India (RBI) data. The weighted average fresh term deposit rate at public sector banks rose 15 basis points to 6.33% in May from 6.18% in April, bucking the broader trend as private sector banks cut their rates by 5 basis points to 5.96% during this period. A basis point is a hundredth of a percentage point.
Bank credit to the corporate sector is growing faster than loans to individuals as companies increasingly shift to the loan market from bond financing to save costs amid rising corporate bond yields. Bank credit to industry including large and small companies grew 18% year-on-year in the fortnight ended May 31 versus 15% growth recorded in retail loans, latest data from the Reserve Bank of India (RBI) shows. Bank lending rate cuts due to the cumulative 125 basis points benchmark repo rate cut by the RBI since February 2025 along with a spike in corporate bond yields have made bank loans more attractive to companies, analysts said.
The Insurance Regulatory and Development Authority of India (Irdai) has granted Certificate of Registration to Prudential HCL Health Insurance to carry on health insurance business in India. The certificate was issued during the 136th Authority meeting held on June 29, the insurance regulator said on Wednesday. With this registration, the number of standalone health insurers operating in India has increased to eight, which includes players like Star Health, Niva Bupa, Care Health and Aditya Birla Health Insurance.
Rather than setting up insurance businesses from the ground up, foreign insurers looking to establish a presence in India are understood to be favouring the brownfield route, with acquisitions and majority stake purchases emerging as the preferred mode of entry. According to industry executives, foreign players are increasingly viewing India as a brownfield opportunity rather than a greenfield market, with distribution emerging as the single biggest reason.
India’s life insurance industry is grappling with high surrender and withdrawal payouts due to weak policy persistence, creating uncertainty in asset-liability management (ALM), the Reserve Bank of India (RBI) said in its Financial Stability Report released on Tuesday. The report also flagged mounting pressure on the general insurance sector, where rising claims intensity and the concentration of claims in health and motor insurance are weighing on underwriting performance and increasing reliance on investment income to support profitability.
Kotak Mahindra Bank will acquire Deutsche Bank’s retail banking, private banking and wealth management business in India, the bank informed the exchanges on Tuesday. The deal size is pegged at Rs 282 crore. The transaction is subject to regulatory approvals, including clearance from the Competition Commission of India, and is expected to close by September 2027. The business being acquired comprises a loan book of around Rs 29,000 crore, deposits of Rs 16,000 crore and assets under management (AUM) of Rs 10,500 crore. It serves nearly 150,000 customers and has a workforce of about 1,000 employees, who are expected to join Kotak upon completion of the deal.
The Reserve Bank on Tuesday said Indian financial system remains resilient, underpinned by strong bank and non-bank balance sheets, as gross non-performing assets of banks have touched a multi-decadal low of 1.8 per cent at end-March 2026. Despite repeated shocks, the global financial system has thus far demonstrated notable resilience, with markets remaining orderly after an initial bout of volatility following the outbreak of the West Asia conflict, said the Financial Stability Report (FSR). "India's sound macroeconomic fundamentals place it in a stronger position than many of its peers and provide greater resilience to external shocks than in past crisis episodes," said the half-yearly publication, with contributions from all financial sector regulators.
The fall in government security yields is likely to help banks recover part of the Rs 30,000 crore treasury losses they reported in the fourth quarter of FY26 ended March 31, 2026, said bankers. Over the past week, government bond yields have declined by 25-30 basis points, reversing the earlier trend. This relief comes at a time when tighter liquidity conditions, volatility in global markets and rising domestic inflation pushed yields higher had taken government bond yields above 7% for most part of the fourth quarter.
HDFC Bank on Monday appointed Rajiv Kumar, a former IAS officer and ex-Chief Election Commissioner of India, as its Part-time (Non-Executive) Chairman, ending a months-long search for a permanent head following the abrupt exit of Atanu Chakraborty in March. The bank's board, at a meeting held on June 29, approved Kumar's appointment as an Additional (Independent) Director for a period of four years with effect from June 30, 2026. His appointment as Part-time Chairman for a period of three years is subject to the approval of the Reserve Bank of India. The appointment as Independent Director will additionally require shareholder approval.
Some Indian banks could see stronger interest margins in the July-September quarter as the central bank's measures boost rupee liquidity and reduce the cost of borrowing for funds that mature within a year, four bankers said. Certificates of deposit (CDs), which banks use to raise funds for up to one year, have seen rates plunge by up to 60 basis points over the past three weeks. The Financial Benchmarks India Ltd three-month CD reference rate fell to 6.65% last Friday from 7.25% on June 4. The Reserve Bank of India's moves to attract foreign currency inflows are expected to bring in billions of dollars, boosting liquidity, lowering funding costs and reducing reliance on CDs, a relatively expensive source of funding.
The rush to capitalise on the Reserve Bank of India’s FCNR(B) deposit scheme is already pushing up borrowing costs, with leveraged loan rates rising 20-25 basis points as banks compete intensely for a window that bankers estimate could generate substantial foreign currency inflows. The rate pressure is emerging faster than many expected. Floating rate loans against FCNR(B) deposits are currently available at 4.90-5.25%, but once converted into fixed-rate instruments for three or five years, the cost climbs to 5.25-5.50% after accounting for the term premium. “Loans are now available at floating rates of 4.90-5.25% for depositors. Once these are converted into fixed-rate loans for three or five years, the cost rises to 5.25-5.50% after adding the term premium,” said a senior public sector bank executive who has received preliminary quotes from foreign banks.
Smaller and mid-sized banks are approaching the GIFT City branches of Indian lenders to access the leverage-backed FCNR(B) deposit mobilisation opportunity opened up by the Reserve Bank of India (RBI), as they lack the overseas presence and operational capabilities needed to directly navigate stringent foreign compliance requirements, bankers said. “Since we do not have foreign branches, we would have to connect with foreign branches of Indian banks or with foreign banks for leverage,” said a treasury official at a small finance bank, adding that they are reaching out to banks with whom they already have an existing relationships.
Banks' credit grew 17.7% at the end of the fortnight to June 15, unchanged from the print seen in the preceding two-week period, while deposits growth print slowed to 12% as compared with 12.2% for the same period, Reserve Bank of India data showed. The current growth rates for both credit and deposits are faster as compared to the prints seen a year back. At the same time last year, credit growth was recorded at 9.6% while deposits grew at 10.4% clip.
The Reserve Bank of India (RBI) on Wednesday proposed a new framework for the use of artificial intelligence as its adoption by domestic banks expand significantly. In a draft circular, the RBI urged banks to put in place proper governance, risk management, and controls, along with continuous oversight. Under the new framework, the regulator proposed broad principles to manage risks from third-party models. The regulator has sought stakeholder feedback by July 24. “Considering model usage has expanded significantly and regulated entities are increasingly using models, including those employing artificial intelligence / machine learning, across various business and decision-making processes; weaknesses in their governance, oversight, risk management and controls may expose the regulated entities to financial, operational, compliance, and reputational risks,” the regulator said in a draft circular.
The Reserve Bank of India (RBI) on Wednesday revised the way banks calculate and report their foreign exchange exposures. The revised rules do away with the separate calculation of onshore and offshore net open positions (NOP), allow banks to include accumulated surpluses from overseas operations in NOP calculations, require forex risk capital charges to be maintained against actual NOP, and modify the shorthand method for measuring exposure by treating gold positions separately. The central bank has also allowed certain structural foreign exchange positions to be exempted from NOP calculations. Market participants said that the exemptions will create room for additional positions and improve trading capacity for banks.
The banking system's liquidity slipped into deficit after remaining in surplus for nearly three months, weighed down by advance tax outflows and higher currency leakage. Net liquidity stood at a deficit of Rs 19,971.9 crore on Monday, according to the latest Reserve Bank of India (RBI) data, marking the first deficit since March 22. RBI's Intervention and Market Response Consequently, the weighted average call rate (WACR) — the operating target of monetary policy — rose to 5.38 per cent on Tuesday from 5.33 per cent on Monday. To ease the transient liquidity tightness, the RBI injected Rs 1.41 trillion into the banking system on Tuesday through a seven-day variable rate repo (VRR) auction.
RBI's final rules on scale-based regulation of NBFCs tighten oversight of bank-owned entities, effectively subjecting them to bank-like standards. The central bank said the Rs 1 lakh crore threshold for upper layer NBFCs will now be reviewed every three years, instead of five, allowing quicker response to growth, inflation and emerging risks. But all bank led NBFCs, irrespective of size, will be subject to upper-layer NBFC norms, except listing. NBFCs within bank groups will also have to follow regulations applicable to banks when they undertake similar activities, regardless of their classification.
The Reserve Bank of India (RBI) has allowed Indian banks to use their branches in GIFT city to mobilise Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits and offer leverage for such deposits. According to sources, State Bank of India (SBI) is expected to be among the first lenders to launch the offering through its GIFT City branch in Ahmedabad. “We are launching our FCNR(B) deposits from the GIFT City branch. We are offering leverage of up to nine times the deposit amount held by NRIs and high-net-worth individuals (HNIs),” a senior SBI official said. India’s largest lender, SBI, has a network of 244 international offices across 29 countries. Currently, it offers loans against FCNR(B) deposits maintained at its India branches through its GIFT City unit.
Axis Bank has an eligible credit facility of over Rs 10,000 crore under the Emergency Credit Guarantee Scheme 5.0 for the micro, small, and medium enterprises, a senior official told the media in a round table on Tuesday. “We have invested quite a bit in that. Just to give you a perspective, the opportunity is about Rs 10,000 crores, that is the eligible amount across the companies. I think he would have a larger amount,” said Prashanth T S, group head, mid-corporate & medium enterprises group, Axis Bank.
The share of household deposits in India’s banking system declined to 59.3% in FY26 from 63.2% in FY19, reflecting a structural shift in deposit composition as institutional deposits gain ground, according to a report by Crisil Intelligence. While households remain the largest contributor to the banking system’s deposit base, the report said that financial and non-financial corporations have steadily increased their share of deposits. The combined share of these segments rose to 26.3% in FY26 from 20.5% in FY19, indicating a gradual diversification of banks’ funding sources. Despite the decline in their overall share, households continue to play a critical role in supporting banks’ low-cost funding base. The report said that households accounted for around 70% of system current account savings account (CASA) balances in FY26, significantly higher than their share in overall deposits.
The Reserve Bank of India (RBI), through a series of measures, is making the FCNR(B) deposit route more attractive for both depositors and lenders, bankers said. The measures include allowing unlimited leverage against deposits and permitting Indian banks to lend to non-resident Indian (NRI) clients through their overseas branches. Bankers have been seeking clarity from the central bank on these measures since they were announced on June 5. Earlier, there were concerns over whether the RBI would impose limits on the extent of leverage available against FCNR(B) deposits. “The RBI is not against such leverage. FCNR(B) deposits backed by loans from banks, whether Indian or foreign, will come with a lien, with the first charge on the deposit resting with the originating bank. The depositor will receive a portion of the interest earnings from the loan amount in their account,” said a banker.
Indian banks have turned cautious on lending to small businesses as early signs of stress emerge in the micro, small and medium enterprises (MSME) segment, prompting tighter underwriting and a moderation in credit growth, showed a report by 360 ONE Capital citing a CRIF High Mark report. MSME loan growth slowed to 12.7% year-on-year in April 2026 from around 18%-20% seen in previous quarters, as lenders reassessed risk and curtailed fresh disbursals, data from CRIF High Mark showed. The slowdown was sharper in active loans, which advanced just 2.5% year-on-year compared with 6%-9.4% earlier, indicating a more cautious stance by lenders, the CRIF High Mark report showed.
India's financial services sector has long been a testing ground for technology-led disruption. From the UPI revolution that made India the world's largest real-time payments market to the Jan Dhan-Aadhaar-Mobile stack that brought 500 million people into the formal financial system, the sector has repeatedly demonstrated the capacity for transformative change. The current wave of Al adoption is, by most measures, the most consequential yet.
In a first, the Insurance Regulatory and Development Authority of India (Irdai) has proposed enhanced disclosure norms for insurance intermediaries earning commissions above a prescribed threshold. Aiming to curb misselling of insurance policies, the regulator has released a consultation paper proposing that insurance intermediaries disclose details of commission income, related-party transactions, profits earned and dividend repatriation. Under the exposure draft, corporate agents, brokers, insurance marketing firms and web aggregators earning more than ₹10 crore in commission income in a financial year will be required to annually disclose to Irdai details of commissions earned, related-party transactions, profits and dividends. These entities will also have to publish the disclosures on their websites.
The Reserve Bank of India (RBI) has asked banks to report data on FCNR (B) deposits, external commercial borrowings and overseas foreign currency borrowings daily, it said in a notification on Friday. On June 8, the RBI launched the swap facility for FCNR (B) deposits and ECBs. It would absorb the full hedging cost on incremental FCNR(B) deposits and partial hedging cost for ECBs, as part of a broader package of measures aimed at attracting foreign currency inflows and supporting the rupee.
Punjab National Bank has increased the interest rate on FCNR(B) deposits of $1 million and above to 6.60% for tenures of three to five years. For deposits of less than $1 million, the public sector bank is now offering 6.50% per annum. Earlier the bank was offering rates in the range of 6-6.10%.
Intense competition for FCNR (B) deposits has left some lenders apprehensive they could lose overseas customers as their offerings may not be as attractive as those of others. With the Reserve Bank of India (RBI) having lifted the cap on these deposits, a clutch of banks has raised their interest rates making their offers more attractive. In fact, a couple of banks, that had announced new interest rates on FCNR (B) deposits, are understood to be reconsidering their products after the removal of the cap.“We were early to announce rates but will revisit them in the light of the new rules,” said a senior banker.
Commercial banks have sought approval from the banking regulator to allow existing non-resident Indian customers to prematurely withdraw and rebook deposits to take advantage of the time-bound FCNR deposit scheme, which in some cases offers almost double the returns of regular term deposits. Some large depositors are instructing their banks to prematurely close term deposits and redeploying the funds in other banks, bankers said. Banks are offering between 6% and 7.1% for three- to five-year deposits under the special scheme, compared with 3.35% to 4% previously.
The Reserve Bank has cancelled the licence of Karnataka-based Shree Mahalaxmi Urban Co-operative Credit Bank due to its worsening financial position. The Registrar of Co-operative Societies, Karnataka has also been requested to issue an order for winding up the bank and appoint a liquidator, the Reserve Bank of India (RBI) said in a statement on Thursday. On liquidation, about 97.9 per cent of depositors would receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC). Giving reasons for cancellation of the licence, the RBI said the lender does not have adequate capital and earning prospects and does not comply with certain provisions of the Banking Regulation Act, 1949.
The Reserve Bank of India (RBI) on Wednesday temporarily removed interest-rate caps on select non-resident external (NRE) and foreign currency non-resident (bank) [FCNR(B)] deposits, giving banks greater flexibility to attract overseas funds at a time when policymakers are seeking to strengthen foreign currency inflows and support external-sector stability. Under the revised framework, banks will be free to offer higher interest rates on fresh NRE deposits with maturities of three years and above. The RBI has also withdrawn the ceiling on interest rates for fresh FCNR(B) deposits with maturities of three to five years. The relaxation will remain in force until September 30 and will apply both to fresh deposits mobilised during the period and to eligible renewals upon maturity.
The Reserve Bank of India’s (RBI) incentives to attract Foreign Currency Non-Resident (Bank) (FCNR(B) deposits have prompted leading private-sector banks to approach overseas lenders with proposals aimed at financing their non-resident Indian (NRI) clients and encouraging them to place funds through this route. “Foreign banks will gain access to a large NRI customer base and tap secured lending opportunities with limited credit risk. We, in turn, can multiply FCNR deposits beyond our existing dollar liquidity, while NRIs benefit from interest-rate arbitrage,” said a senior banker at a private-sector lender. According to sources, HDFC Bank, Axis Bank and IndusInd Bank have lined up proposals for offshore lenders as they compete for a share of the estimated $50 billion expected to flow through the FCNR(B) route.
The US-Iran peace deal and the planned reopening of the Strait of Hormuz may have calmed oil markets, but marine cargo and war-risk insurance premiums are unlikely to fall anytime soon, according to industry executives. “For the marine community, crucially absent from the agreement are the practical details surrounding the reopening of the Strait of Hormuz reopening, particularly Iran’s guarantee to respect freedom of movement within the Strait and the region as a whole,” said Marcus Baker, Global Head of Marine, Cargo & Logistics, Marsh. Baker added that while some marine insurers recognise that conditions in the Persian/Arabian Gulf region have improved over the weekend, the overall market response in the short term will largely depend on further de-escalation of hostilities or perceived breaches of the agreement.
The earnings season got over last month. Before we analyse the quarterly performance of listed Indian banks, let's take a look at how they performed in FY26. The combined net profit of listed private and public sector banks is ₹3.94 trillion, the highest ever, 7.47 per cent higher than in FY25. The private banks' collective net profit is up 4.02 per cent to ₹1.96 trillion and that of public sector banks by 11.13 per cent to ₹1.98 trillion. All figures are rounded off. All PSBs have recorded a rise in net profit for the year -- the quantum of rise varies between 1.65 per cent (Punjab National Bank) and 56.18 per cent (Indian Overseas Bank). In contrast, four private banks have reported a drop in net profit. They are IndusInd Bank Ltd (64.69 per cent), Bandhan Bank Ltd (55.43 per cent), Kotak Mahindra Bank Ltd (14.85 per cent) and Axis Bank Ltd (7.27 per cent).
The rising healthcare costs are seen as the key factor behind the health claim burden and rising renewal premiums. When you say healthcare is expensive, what goes unsaid is that people are using more healthcare because they are getting treated more proactively. So, the healthcare utilisation rate rises not by 5-10%, but exponentially. People today are seeking more healthcare to live longer, and be more active and productive in advanced age. This is the trend; you cannot argue against it. So the product, health insurance, is essentially paying for the increased healthcare use across society.
The RBI's recent measures to incentivise overseas borrowings could lower funding costs for banks by 2-2.50 per cent through the external commercial borrowing (ECB) route, helping lenders raise resources at cheaper rates while improving liquidity conditions, according to a report. It also said that the RBI's concessional USD/INR swap facility for ECBs and overseas foreign currency borrowings (OFCBs) will significantly reduce hedging costs for banks, allowing them to mobilise overseas funds while keeping funding costs under control. "The borrowing cost for banks via the ECB route is expected to fall by 2-2.50 per cent, which will enable the system to raise resources while keeping funding costs under control," said brokerage firm Motilal Oswal Financial Services in its report.
Indian lenders have sought clarity from the Reserve Bank of India (RBI) on whether domestic banks can leverage the foreign currency non-resident bank [FCNR(B)] deposit scheme by extending loans to depositors through their overseas branches, bankers said. This follows the RBI’s decision to allow depositors to borrow from foreign banks for placing FCNR(B) deposits with Indian banks, while permitting Indian banks to issue letters of credit (LoCs) to support such borrowings. “It remains unclear whether the guidelines permit overseas branches of Indian banks to provide leverage to their own customers. The current rules do not explicitly address that scenario, and further clarification is needed,” said a senior executive at a large private-sector bank.
India's bank credit growth accelerated to its fastest pace in nearly two years, driven in part by rising borrowing from oil marketing companies hit by lower realisations following the recent surge in crude prices, according to a report by Times of India. Credit expanded 17.7% year-on-year in the fortnight ended May 31, 2026 — the strongest growth recorded so far in FY27 and the highest since June 2024. Outstanding bank credit rose by Rs 1.5 lakh crore between March 31 and May 31, 2026, marking a 0.7% increase in the first two months of the financial year, the report said. Total outstanding credit reached Rs 215.2 lakh crore by the end of May.
A day after the Reserve Bank of India (RBI) released the final contours of its foreign currency non-resident bank [FCNR(B)] deposit scheme, banks have started offering rates ranging from 5% to over 7%. The higher returns reflect the central bank’s decision to exempt incremental FCNR(B) deposits from cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements, experts said. State Bank of India has launched a special deposit scheme, SBI Advantage FCNR(B), with a one-year lock-in period, offering interest rates of 5.25-6% in the three- to five-year maturity bucket. HDFC Bank and Central Bank of India are offering up to 6% on longer-tenor FCNR(B) deposits, while YES Bank and AU Small Finance Bank are offering as much as 7.1% on five-year deposits. CSB Bank is offering 7.05% on FCNR(B) deposits. The revised rates came into effect on June 10.
The asset quality of Indian banks is expected to further improve over the next year, providing cushion against pressure on margins, liquidity and credit growth arising from geopolitical tensions and broader macroeconomic uncertainties. According to consensus estimates compiled by S&P Global Market Intelligence, the gross non-performing asset (NPA) ratio of State Bank of India is seen declining to 0.92% by March 2027 from 0.96% at the end of FY26. HDFC Bank‘s bad loan ratio is projected to improve to 0.76% from 0.78%. The report attributed the betterment to moderating stress in unsecured retail segments such as personal loans, credit cards and microfinance.
The banking sector expects to attract around $40–50 billion through Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits after the Reserve Bank of India’s measures announced last week to boost foreign currency inflows. According to an SBI Research Ecowrap report, fresh FCNR(B) inflows could reach $40–45 billion under the scheme. “In 2013, when the RBI introduced the FCNR(B) facility, fresh inflows of $24.5 billion were mobilised within three months. This time, the facility window is open for four months, and we believe fresh FCNR(B) deposits could amount to $40–45 billion,” the report said. Outstanding FCNR(B) deposits stood at $33.8 billion at the end of March 2026, compared with $32.8 billion a year earlier. “Banks with a larger overseas presence, such as Bank of Baroda, SBI and HDFC Bank, are naturally better positioned to benefit as they have stronger access to the NRI customer base,” a senior public sector bank official said.
Life insurers reported 5% year-on-year growth in new business premium (NBP) in May, the slowest monthly expansion in more than eight months, as the impact of the GST rate reduction on premium collections faded after supporting double-digit growth in the preceding months. The industry’s total new business premium stood at ₹32,030.84 crore in May, compared with ₹30,463.21 crore in the same month last year, according to data released by the Life Insurance Council. The slowdown comes a month after life insurers reported their highest monthly growth in NBP in more than two years. In April, the industry’s NBP had risen 39% year-on-year to ₹30,550 crore. According to the May data, state-owned Life Insurance Corporation of India (LIC) reported a 3% growth in NBP to ₹19,042 crore, while the 26-member private life insurance industry posted an 8% increase to ₹12,989 crore. Both LIC and private life insurers had reported strong double-digit growth in recent months after the government exempted individual life insurance products, including term life policies, from GST in September 2025.
IT service firm, Dynacons Systems and Solutions has secured an order of over Rs 125 crore from the Central Bank of India for a project aimed at the expansion of private cloud. The order will also focus on building advanced AI infrastructure. Dynacons Systems and Solutions: Order key details The project which is domestic in nature aims at building larger and more advanced cloud and AI. It also includes the establishment of a containerization platform and servers based on the NVIDIA H200 Blackwells GPU. The total order value exclusive of GST stands at Rs 125.88 crore, and will be executed within a period of five years. The company in its exchange filing clarified that there are no related-party transactions involved in the project.
Reserve Bank of India (RBI) Deputy Governor Swaminathan J urged that banking-sector resilience should be deliberately built rather than left to chance, laying out five pillars of ‘resilience by design.’ Drawing on India’s post-2015 banking reforms, he argued that transparent stress recognition, stronger balance sheets, sharper supervision, adaptive regulation, and resilient internal bank practices have made the system sturdier- and that work must continue as new risks emerge. Transparent recognition of stress The first pillar, Swaminathan J said, is the transparent recognition of stress. He cited the post-2015 Asset Quality Review as a turning point, “Recognition required banks to provision, owners to recapitalise, borrowers to negotiate, supervisors to intervene, and markets to reassess risk. Transparency changes incentives.”
The resilience of banks will shift from fixing known balance-sheet stress to managing complexity and uncertainty, Reserve Bank of India Deputy Governor Swaminathan J said while speaking at Columbia University on Monday. The speech was uploaded on the regulator’s website on Wednesday. “Recent years have shown that shocks can arise from very different sources: pandemics, geopolitical tensions, supply chain disruptions, commodity price volatility, cyber incidents or sudden shifts in market sentiment. The task, therefore, is not only to prepare banks for known risks, but also to make them adaptable to risks whose timing, form and transmission may be difficult to predict,” said Swaminathan. He said growth in retail, digital and microfinance lending has widened access and thus requires stricter underwriting, fair recovery practices and close monitoring of borrower leverage.
India’s money-market turnover jumped to a record as state-owned lenders stepped up borrowing to fund booming credit demand. The value of trades in the so-called tri-party repurchase segment, which accounts for about 70% of the nation’s money markets, rose to an all-time high of 5.5 trillion rupees ($57.8 billion) on May 13 and has stayed elevated since, according to Bloomberg-compiled data. India’s economic growth has held up well despite the energy crisis caused by the US-Iran war, preserving credit demand. State Bank of India is seeing strong loan uptake from sectors including power, renewables and data centers, Chairman CS Setty said Wednesday.
The government is set to soon constitute the proposed High-Level Committee on Banking for Viksit Bharat, with the aim of receiving its report within three to four months and initiating a new phase of comprehensive banking sector reforms. Sources said the terms of reference for the committee are almost ready and the panel will be constituted once the members are finalised. The committee is expected to undertake a fundamental review of the banking sector architecture and recommend measures to strengthen the system in line with India’s long-term growth ambitions. Among the key issues likely to be examined are the creation of larger Indian banks through consolidation, enhancement of foreign direct investment (FDI) limits in public sector banks (PSBs), rationalisation of voting rights for investors, and a review of regulatory requirements such as the Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and banking licence norms.
Banks have sanctioned Rs 35,000 crore loans under the Emergency Credit Line Guarantee Scheme (ECLGS) to MSMEs and industries impacted by the West Asia conflict. The scheme, approved by the Union Cabinet on May 5, aimed at providing additional credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore for airlines hit by the ongoing geopolitical crisis. Lenders have cleared about 80,000 applications with loans amounting to Rs 35,194 crore, and guarantees worth Rs 15,720 crore have been issued as of May 29, Department of Financial Services Joint Secretary Manoj Muttathil Ayyappan told reporters here.
Bank credit stood at Rs 211.87 lakh crore as on May 15, largely flat compared with the previous fortnight, registering a marginal decline of 0.1%, according to data released by the Reserve Bank of India on Friday. On a year-on-year basis, advances grew 16.2%, translating into an absolute increase of Rs 29.59 lakh crore. Deposits came in at Rs 256.89 lakh crore, down 0.7% over the previous fortnight, with an absolute decline of Rs 1.8 lakh crore. Despite the sequential moderation, deposits recorded a healthy 12.2% rise year-on-year, reflecting an increase of Rs 28.01 lakh crore. Investments rose 0.55% on a fortnightly basis to Rs 69.65 lakh crore, while the year-on-year growth stood at 4.2%, with an absolute increase of Rs 2.8 lakh crore.
India’s banking sector reported a 46% year-on-year jump in frauds to ₹48,021 crore in FY26, the highest in three years, even as the number of fraud cases more than halved to 10,114 from 23,722 in FY25, according to the Reserve Bank of India’s Annual Report. The fraud amount in FY26 was more than four times the ₹11,013 crore reported in FY24. Public sector banks accounted for 74% of the total fraud amount in FY26, reporting frauds worth ₹35,709 crore across 5,418 cases. Private sector banks reported ₹11,399 crore involving 3,956 cases. The RBI said data for FY26 included fraud classification in 314 cases amounting to ₹30,199 crore pertaining to previous financial years, which were reported afresh after re-examination in compliance with the Supreme Court’s March 27, 2023 judgement. “An assessment of bank group-wise fraud cases over the last three years indicates that although the number of frauds for public and private sector banks have reduced, the amount involved has increased over the years,” the RBI said.
The Indian banking industry's return on assets (RoA) is expected to slip 10-15 basis points to 1.1-1.2% this fiscal from around 1.3% last fiscal, Crisil Ratings said in a report, citing reduced treasury income and pre-emptive provisioning ahead of the expected credit loss (ECL) framework. Despite the moderation, RoA will remain well above the 20-year average of 0.8% and 10-year average of 0.6%, the ratings agency noted. "The banking sector's net interest margin (NIM) is expected to hold steady at 2.9% this fiscal, after declining 20 basis points (bps) last fiscal," said Subha Sri Narayanan, Director, Crisil Ratings. "Outstanding deposit rates fell ~50 bps against a decrease of ~80 bps in lending rates last fiscal, following a cumulative repo rate cut of 125 bps. However, the cost of liabilities has likely bottomed out. As credit growth continues to outpace deposit growth, competition for deposits remains intense. This, coupled with increasing reliance on pricier funding sources such as bulk deposits, would likely push deposit costs up," she added. Crisil Ratings expects NIM on a full-year basis to remain stable, though higher deposit costs may lead to a correction from last fiscal's exit NIM of above 3% in the fourth quarter. The agency's base-case assumes a stable policy rate this fiscal. Apart from NIM, fee and other income will also impact earnings. Total other income is likely to soften by 5-10 bps to 1.2% last year, primarily due to normalization in treasury income after sharp bond yield gains in H1 last year. Fee and commission income should grow steadily, underpinned by healthy bank credit growth of around 13% this fiscal.
