Margin pressure

Investment revival will boost credit growth

The Q3FY24 results of several private-sector banks indicate trends that may hold across the sector. There’s visible compression in the net interest margin (NIM). Banks also hold higher provisions against exposures to alternative investment funds (AIFs) as mandated by the Reserve Bank of India (RBI). The central bank’s stipulation about assigning higher risk weighting for unsecured loans has started slowing growth. Non-performing assets continue to be under control across most of the private sector at least — most public-sector banks are yet to declare results. IndusInd Bank is somewhat of an exception since it has high exposure in Tamil Nadu