Q1 earnings preview: Banking sector will take some more time to revive

While there is no clear trend for the sector as a whole, the quarter may be in favour of private banks

After a tough FY18, the beginning of the financial year 2018-19 (FY19) was expected to be a better one for the banking industry. However, with the Reserve Bank of India (RBI) starting to tighten policy rates, the sector might take some more time to revive.

The credit growth, according to the RBI, has improved for the system at 12.3 per cent for the first two months of FY19 compared to 9.8 per cent growth seen in Q4FY18. While the system-wide growth has picked up, a number of PSU banks have had constraints in lending. The space vacated by state-owned banks