Latest news with #SFBs
India Gazette
2 days ago
- Business
- India Gazette
Indian Banking Sector to see moderate credit growth amid profitability pressure: BCG Report
ANI 11 Jun 2025, 16:49 GMT+10 New Delhi [India], June 11 (ANI): The Indian banking and financial services industry (BFSI) is currently experiencing a dynamic period characterised by moderate credit growth expectations alongside evolving profitability pressures, according to a report by Boston Consulting Group (BCG). The report further adds that, while certain segments, such as mutual funds and insurance, demonstrate robust upward trajectories, the overall credit growth for the year has seen a slowdown, even as deposit growth remains profitability within the banking sector is facing headwinds. Net Interest Margins (NIMs) are projected to be under pressure as repo-linked loans reprice due to rate cuts, compelling banks to lower deposit rates. However, an elevated Credit-Deposit (CD) ratio intensifies competition for low-cost deposits, further limiting banks' ability to reduce rates and impacting profitability, particularly for mid-sized banks and Small Finance Banks (SFBs). While the banking industry overall reported a 16 per cent year-on-year growth in Net Profit, this masks varied performances. Furthermore, Public Sector Undertaking (PSU) banks have shown a strong upward trend with a 26 per cent (YoY) PAT growth, outperforming private banks which posted an 8 per cent (YoY) PAT growth. However, SFBs have experienced a sharp decline in profitability due to rising credit costs. Banks have seen an improvement in credit costs, declining from 0.6 per cent to 0.4 per cent, while NBFCs faced an increase from 1.3 per cent to 1.7 per report also highlights that, the broader BFSI landscape presents a mixed picture. Mutual fund Assets Under Management (AUM) reached an all-time high, demonstrating an impressive 18 per cent year-on-year growth. The insurance sector also showed positive momentum, with premiums rising by 7 per cent year-on-year in March 2025. This upward trajectory in MF and insurance premiums signifies continued investor interest and market penetration in these terms of deposits, growth has remained steady, with overall deposits increasing by 11 per cent year-on-year in FY25, reaching Rs229.3 Lakh Crore. Aggregate deposits grew by 12 per cent year-on-year. However, CASA (Current Account Savings Account) growth has remained muted, indicating a shift in the composition of deposits. Simultaneously, as highlighted earlier, credit growth has slowed down this year, with total net advances growing by 12 per cent year-on-year, and aggregate credit growing by 13 per cent, year-on-year. (ANI)
Time of India
06-06-2025
- Business
- Time of India
FD interest rate up to 9.10%: These banks are still offering over 8% interest on fixed deposits for senior citizens
Fixed deposit (FD) investors will soon start to feel the impact of the Reserve Bank of India's (RBI) third repo rate cut in 2025. On June 6, the RBI's Monetary Policy Committee (MPC) announced a 50 basis point reduction, bringing down the repo rate to 5.5%. As a result, banks will start reducing their fixed deposit interest rates in response to the lower cost of borrowing. This trend spells concern for conservative investors who rely heavily on FDs for steady and secure returns. Investors are now faced with a narrowing window to lock in higher interest rates, as further cuts or rate stagnation could lead to even lower FD returns in the near future. Also read: New FD rates from June 1, 2025: PNB, Canara Bank revise interest rates across tenures FD rates may decline soon A downward trend is anticipated in the upcoming months, even though it might take some time for the effects of the repo rate cuts to take effect in retail deposit rates. This implies that, particularly for senior citizens, who usually receive interest above regular rates, the current FD interest rates may be among the highest available for some time. Axis Bank revises ATM transaction fees effective July 1, 2025: Check revised charges Lock in high FD rates Many banks are still offering attractive FD rates. For senior citizens, some banks continue to provide interest rates of 8% or more, making this a crucial opportunity to lock in higher returns before further rate revisions kick in. Bank Name Interest Rates (p.a.) Highest slab % Tenure SMALL FINANCE BANKS AU Small Finance Bank 8.25 18 months Equitas Small Finance Bank 8.55 888 days ESAF Small Finance Bank 8.25 444 days Jana Small Finance Bank 8.55 Above 1 year to 3 years NorthEast Small Finance Bank 9.00 18 months 1 day to 18 months 2 days Suryoday Small Finance Bank 8.80 Above 30 months to 3 years Ujjivan Small Finance Bank 8.55 18 months Unity Small Finance Bank 9.10 1001 days Utkarsh Small Finance Bank 8.75 2 years to 3 years Live Events How safe are Small Finance Banks? According to the AU Small Finance Bank website, 'Like other types of banks in India, the RBI regulates and governs SFBs. Therefore, all the banking norms, such as Statutory Liquidity Ratio Requirements, Cash Ratio Reserve Requirements, etc., apply to them. Moreover, the RBI also defines aspects like Eligibility Criteria and Mandatory Promoter Contribution for SFBs. In other words, there are stringent regulations that SFBs must adhere to for their operations. As the RBI regulates the segment, SFBs are as safe as any other type of bank.' Are small finance banks covered under DICGC? Yes, small finance banks are covered under Deposit Insurance and Credit Guarantee Corporation (DICGC). Under this, each depositor in a bank is insured up to a maximum of Rs 5,00,000 for both principal and interest amount held by the investor.
