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The Economic Times

Economy / The Economic Times

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PSBs tap liquidity buffer to meet strong loan demand

Public sector banks in India are seeing their liquidity coverage ratios decline. This trend is driven by strong loan demand outpacing retail deposit growth. Banks are using their excess liquidity to fund loans. This situation is expected to improve with new regulatory norms starting in Q1 FY27. The changes will impact how certain business accounts are treated for liquidity calculations.

16 May 2026 1:27 am