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Economy News

The Economic Times

Economy / The Economic Times

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Banks' liquidity buffers shrink as deposits lag credit growth

Banks are confronting mounting liquidity pressures as loan portfolios expand faster than deposit bases. As a result, liquidity coverage ratios have weakened across a broad set of institutions. Even with abundant liquidity in the wider financial system, banks are struggling to bring in new deposits, pushing up near-term funding costs.

25 Feb 2026 12:36 am