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Regulatory Squeeze Hits NCDs

Recent regulatory efforts targeting interbank borrowing are likely to reduce issuance of banks’ negotiable certificates of deposit (NCDs), push up banks’ funding costs, and reduce profit margins. The net impact is likely to be a further deceleration in banks’ asset growth over the next few quarters, with joint-stock banks likely to see sharper slowdowns than city and rural commercial banks.

Posted September 21, 2017
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