FCNR(B) deposit drive could pressure banks' profitability
Mumbai: The leverage banks are offering to attract foreign currency non-resident (bank), or FCNR(B), deposits could pressure margins, analysts said, as overseas interest rates are lower and lending spreads remain thin.
The impact is likely to be greater for banks with lower funding costs, such as ICICI Bank, HDFC Bank and Kotak Mahindra Bank, because they may have to offer competitive lending rates overseas while keeping deposit rates attractive.
The impact is likely to be greater for banks with lower funding costs, such as ICICI Bank, HDFC Bank and Kotak Mahindra Bank, because they may have to offer competitive lending rates overseas while keeping deposit rates attractive.
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