ICRA expects growth to remain healthy, supported by retail and MSMEs as well as the shift of corporates to banks from bonds. Sizeable FCNR deposit inflows have strengthened the funding profiles of banks, providing headroom for credit expansion. The impact of the West Asia conflict continues to be monitorable. ICRA expects profitability to moderate slightly but remain healthy in FY2027.

• Headline asset quality metrics stayed comfortable, with gross non-performing advances (GNPAs) and net NPAs (NNPAs) at 1.7% and 0.4%, respectively, as on June 30, 2026 (1.8% and 0.4%, respectively, as on March 31, 2026).
  
• Profitability remained healthy on the back of benign credit costs, with the annualised return on assets (RoA) at 1.3% in Q1 FY2027 (1.3% in FY2026).
  

Exhibit: Bank-wise^ FCNR mobilisation