Banks step up focus on fee-based income; treasury gains come under pressure

Further, bankers said that there is still room to reduce rates on term deposits, and bulk deposit rates have already declined

Banks are shifting focus to fee-based services, product offerings, and recoveries as treasury income in the July–September quarter (Q2) is expected to stay weak. This comes amid declining net interest income (NII) and net interest margins following the recent policy rate cut. Bankers said priority areas include selling priority sector lending (PSL) certificates and expanding wealth management services.

 

Executives also pointed out that there is still room to cut term deposit rates, while bulk deposit rates have already fallen. Together, these measures should help ease pressure on interest income.

 

“Treasury income this quarter will not be sufficient to support the