India’s banking system is facing a sharp liquidity surplus of nearly ₹10 lakh crore, driven partly by strong FCNR-B inflows, which could keep short-term interest rates under pressure. Jefferies expects falling money-market rates and easier liquidity conditions to help banks lower wholesale funding costs, although near-term NIMs may remain under pressure.

India’s banking system is sitting on a surplus liquidity of nearly ₹10 lakh crore, following a sharp increase in foreign currency inflows under the RBI’s FCNR-B scheme. Jefferies expects the liquidity glut, combined with falling money-market rates, to keep short-term funding costs under pressure and could eventually help banks lower their wholesale borrowing rates.......

More https://bit.ly/4xEGtJe

Via businesstoday.in