Axis Bank eyes deposit market share boost on FCNR(B) inflows

Axis Bank is banking on significant inflows from foreign currency non-resident (FCNR(B)) deposits to expand its overall deposit market share, according to the bank's managing director and chief executive officer.

The lender expects the FCNR(B) haul to push its total deposit market share past the 5 percent threshold. Non-resident Indians have been increasingly parking funds in rupee-denominated accounts due to favorable interest rate differentials and currency considerations, creating opportunities for Indian banks to boost their deposit bases.

Management has indicated that net interest margins, a key profitability metric for banks, will turn positive once FCNR(B) funds are systematically deployed into the portfolio. Banks typically deploy such deposits into higher-yielding assets to improve their spread between borrowing and lending rates.

The focus on deposit growth and margin expansion comes as Axis Bank navigates a competitive banking landscape where deposit accumulation has become increasingly critical for funding loan growth. The bank's strategy reflects broader industry trends, where banks are actively competing for stable, lower-cost deposit sources to support their lending operations and improve profitability metrics.