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Indian banks stay resilient after RBI cut as margins squeeze grows, report finds asset quality still steady
Economy
Published on 15 May 2026
West Asia risks may hit banks later in 2027
Indian banks are showing financial stability even as profit margins come under pressure after the RBI’s December 2025 repo rate cut, according to Systematix Institutional Equities. The report notes that lower lending rates have reduced banks’ interest income, dragging net interest margins, though slippages remain broadly controlled. Asset quality in January-March FY26 stayed stable across most banks, while deposit growth remained healthy and loan growth continued to hold up. Banks are also preparing for new ECL credit-loss rules.
- Systematix says bad loans are largely under control
- Repo cut in December 2025 reduced interest income and NIMs
- Slippages during the quarter were broadly in control
- Deposit growth stayed healthy and outpaced loan growth
- Banks are watching West Asia conflict impact for Q2 FY27 or H2 FY27
- New Expected Credit Loss framework will require earlier provisions
Read the full story at The Economic Times
This summarization was done by Beige for a story published on 
The Economic Times