Kaitav Shah (Anand Rathi) says PSU banks were the strongest BFSI performers in Q3, growing faster than system credit on seasonality and a steadier macro backdrop. He flags the trade-off: when PSU banks outgrow the system, asset quality needs closer monitoring over time. Regulatory message The key policy tailwind is liquidity: Shah notes conditions have improved versus last year, helped by a CRR cut and liquidity infusion under the new RBI leadership. Easier liquidity can support growth, but it also stretches credit-deposit ratios—turning ALM discipline into a governance metric, especially for large lenders. Industry-wide implications

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has guided for FY26 growth broadly in line with system levels (with aspirations to outgrow later), but Shah cautions the tighter credit-deposit setup could limit near-term delivery. Smaller private banks remain in “transition mode” post capital raises/management changes (e.g., Yes Bank, RBL), implying the gap vs PSU momentum may persist for 6–12 months. What must change now For PSU banks: sustain growth without letting slippages rise—asset quality is the real KPI behind the rally. For NBFCs/SFBs: the monitorable is credit costs, with Shah calling sub-2% credit cost a strong positive signal, while microfinance stress is easing but remains uneven. Source: Economic Times No Recommendation

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