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Informist, Friday, Jun. 12, 2026

MUMBAI – After ending at a seven-week high Friday, the Nifty Bank sectoral index is seen rising in the following week as the Reserve Bank of India's concessional swap window on foreign currency non-resident dollar-denominated bank deposits, notified Monday, is likely to alleviate banks' problem of deposit growth lagging that of credit, analysts said. Close attention will be on the pace and size of these inflows over the next three months, they said. Banks' credit growth was at a two-year high of 17.65% on year as of May 31, while deposits were up only 12.2% on year, as per data released Thursday by the Reserve Bank of India.

"We expect 30% of incremental deposits in FY27 to come from these FCNR (foreign currency non-resident) deposits," an analyst at a broking firm said. "Large private-sector banks are better placed in this as they have a better ability to attract CASA (current account savings account) than PSUs (public-sector banks) and the valuations have an upside." Motilal Oswal Financial Services expects an inflow of up to $50 billion from this deposit swap facility, slightly higher than an Informist Poll estimate of $43 billion.

However, the outlook for the sector also hinges on whether the US and Iran cement a peace deal over the weekend, and the subsequent movement of crude oil prices. A fall in near-month Brent crude oil futures to a three-month low aided the rise in equities Friday. While banks have not shown major concern on exposure to sectors affected by the war in West Asia, a resolution would boost the outlook on credit while attracting foreign flows into Indian equities, analysts said.

The Nifty Bank index Friday settled at 56814.80 points, up 4.25% on week after the RBI announced measures to boost foreign inflows by primarily offering foreign exchange concessions to banks. In comparison, the benchmark Nifty 50 rose 1.1% over the week. All constituents of the Nifty Bank index ended higher Friday. On a weekly basis, Kotak Mahindra Bank and Axis Bank were the top performers, rising 6.9% and 6.6%, respectively. Shares of Canara Bank ended 3.1% lower on week and YES Bank ended 1.2% lower.

"For the coming sessions, 56,400–56,000 now becomes a crucial support zone (for the Nifty Bank)," Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, said in a note. Dhameja said the index remains one of the strongest segments in the equity market. "A buy-on-dips strategy continues to remain favorable while the index holds above 56,000," he wrote.

TOP HEADLINES

* Motilal Oswal sees up to $50 bln inflow from FCNR (B) deposits swap facility
* Tamilnad Mercantile Bank raises 3-yr to 5-yr FCNR(B) deposit rates to 7%
* Bandhan Bk raises 3- to 5-yr FCNR(B) deposit rates by up to 487 bps to 7.00%
* Indian Bank launches Special FCNR(B) Deposit scheme, effective till Sept 30
* Jana Small Fin Bk modifies articles of association to allow issuing warrants
* Banks hike FCNR(B) rates on 3- to 5-year deposits to attract foreign flows
* IDBI Bank launches FCNR(B) special deposit scheme, effective Thursday
* CSB Bank hikes 3-5 year FCNR(B) deposit rates by up to 305 bps
* YES Bank hikes 3-5 year FCNR(B) deposit rates by up to 285 bps to 6.50-6.60%
* Kotak Mahindra Bank raises 3-5 yr FCNR(B) deposit rates by up to 315 bps
* Axis Bank raises 3-5 year FCNR(B) deposit rates by up to 305 bps to 6%
* Punjab National Bank raises 3-5 year FCNR(B) deposit rates by up to 310 bps
* ICICI Bank raises 3-5 year FCNR(B) deposit rates by up to 310 bps to 6%
* Bk of Baroda launches special FCNR(B) deposit scheme
* Banks to only lend to listed REITs, InvITs with 80% positive cashflow - RBI
* State Bank of India launches SBI Advantage FCNR(B) Deposit scheme
* Karur Vysya Bank raises 3-5 yr FCNR(B) deposit rates by 437 bps to 7%
* AU Small Fin Bank ups 3-5 year FCNR(B) deposit peak rate to 7.10% from 5.15%
* HDFC Bank raises 3- to 5-yr FCNR(B) deposit rates by up to 260 bps to 6%
* Govt open to fresh fincl bids for IDBI Bk stake sale, keeps all options open
* Indian banks better placed than Asian peers amid West Asia war: Fitch Rtgs
* SBI gives INR 88.13 bln to govt as dividend for FY26
* YES Bank receives tax demand notice, penalty of INR 632.70 mln
* RBI fines Canara Bank INR 4.18 million for breach of KYC norms
 

Following are the resistance and support levels for key bank stocks for next week as per calculations based on their prices on the National Stock Exchange:

End

US$1 = INR 95.11

Reported by Cassandra Carvalho

Edited by Rajeev Pai

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