Indian Banks Face Margin Pressure as Credit Growth Outpaces Deposits: Nomura

Nomura warns that Indian banks' margins may decline in FY27 as credit growth outpaces deposits. Rising CD ratio, falling LCR, and weak deposit growth remain key risks for the banking sector. Indian banks could face margin pressure as credit growth outpaces deposits. The scenario could weigh on banks' profitability even as loan growth remains healthy, making NIM recovery delayed and shallower than earlier expected.