Analysts cautioned that the coming quarters may stay subdued as the full impact of repo rate cuts is yet to play out on profitability
The Yes Bank rescue has undermined the confidence of depositors in private-sector lenders and will lead to smaller entities losing deposits to state-run banks, a report said on Tuesday.
In its report titled Indian Financials--Staying Maximum Bullish, Morgan Stanley says the banks will cut deposit rates by 100 bps over the next 12 months since real deposit rates are unlikley to stay above 150 bps. Indian private lenders are all set to see a growth.
The government should consider diluting its ownership in state-owned banks to reduce the country's financial burden and push for consolidation, while boosting the number of private lenders, the Reserve Bank of India said in a discussion paper on Tuesday.
Trevor Williams, chief economist, Lloyds TSB Corporate Markets tells CNBC-TV18 that the Street is quite pleased with the agreements in the near-term, but worries persist going forward.