Archive · 19 Aug 2026
Antique Favors Large Private Banks as FCNR Deposits Ease Rates
Antique is a brokerage that studies banks and their share prices.
It prefers large private banks over government-owned banks.
The brokerage said a special type of foreign-currency deposit could bring in about $70 billion.
It expects this money to help steady the rupee and lower government bond yields.
Some private banks may see their profit margins fall slightly if customers borrow money to make these deposits.
However, faster balance-sheet growth and opportunities to sell more products could offset that pressure.
Banks with weaker sources of deposits may benefit from lower market interest rates.
Antique also expects management clarity at HDFC Bank and Kotak Mahindra Bank to refocus investors on their business performance.
It said mid-sized private banks could benefit from better liquidity and stable asset quality.
Overall, the brokerage believes large private banks look relatively attractive because their premium over other banks has narrowed.
Antique prefers large private banks over public-sector lenders, saying their valuation premium has fallen to a decade-low.
The brokerage said FCNR(B) deposits could attract about $70 billion by the end of August, supporting the rupee and lowering bond yields.
Banks offering leverage to fund FCNR(B) deposits may face a 3-15 basis-point reduction in net interest margins.
Softer market rates could benefit weaker-liability-franchise banks including IndusInd Bank, Karur Vysya Bank, City Union Bank and IDFC First Bank.
Antique said management clarity at HDFC Bank and Kotak Mahindra Bank, along with benign asset quality, could support bank shares.
- Who
- Antique and the banks covered in its analysis, including HDFC Bank, Axis Bank, IndusInd Bank, Kotak Mahindra Bank and other private lenders.
- What
- Antique expressed a preference for large private banks over public-sector lenders while assessing margins, FCNR(B) deposits, liquidity and valuations.
- When
- The FCNR(B) deposit scheme began on June 8, with about $70 billion in inflows expected by the end of August.
- Where
- The analysis concerns Indian banks, the INR-USD exchange rate and the Indian government-bond market; no specific location is stated.
- Why
- Antique said large private banks’ valuation premium has fallen to a decade-low, while softer rates, balance-sheet growth and possible management resolutions could support selected lenders.
- Brokerage
- Antique
- FCNR(B) inflows
- About $70 billion expected by the end of August, according to Antique
- Government bond yield
- The 10-year G-sec yield softened from above 7% to 6.8%, according to the brokerage
- Potential margin impact
- A 3-15 basis-point dilution for some private banks offering leverage for FCNR(B) deposits
- Potential beneficiaries of softer rates
- IndusInd Bank, Karur Vysya Bank, City Union Bank, IDFC First Bank, HDFC Bank and Axis Bank
- Valuation assessment
- The premium of large private banks over PSU and mid-sized private banks has fallen to a decade-low
- Additional support
- Antique cited balance-sheet growth, cross-selling opportunities, improved liquidity and benign asset quality