Banks are still operating in a difficult funding environment, and the central challenge is to raise stable liabilities without slowing credit expansion. The special foreign-currency deposit route has benefited some banks more than others, and deposit mobilisation remains uneven across institutions.

The issue sits inside a larger banking question: how to maintain credit growth while managing deposit competition and cost of funds. That makes the topic relevant to banking stability, liability management, and the transmission of monetary conditions through the financial system.

Why the issue matters

When banks struggle to mobilise deposits evenly, lending capacity can become more dependent on costly or less stable funding sources. That can squeeze margins, affect loan pricing, and create a trade-off between growth and balance-sheet comfort.

Static UPSC linkage

The topic connects to the broader Indian banking framework under the Reserve Bank of India, the role of deposit mobilisation in financial intermediation, and the recurring policy debate on the cost of funds versus credit growth.

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