Loan growth across Indian banks is strengthening, while lending margins are showing signs of recovery, according to IIFL Capital. The brokerage expects higher rates on fresh loans and improved lending spreads to support banks’ profitability in the coming quarters. However, near-term margins may remain under pressure due to the impact of Foreign Currency Non-Resident (FCNR) deposits. The outlook suggests gradual improvement in banks’ earnings, supported by credit demand and better lending economics.
