New Delhi, June 24 -- Public sector banks (PSBs) in the country rely more on deposits as compared to private banks whereas private sector banks, on the other hand, actively use borrowings to manage their funding needs, according to a report by HDFC Securities.

The report highlighted that this difference in funding sources has led to a funding cost disadvantage of 20-30 basis points (bps) for PSBs in recent times.

The report stated "On the liabilities side of the balance sheet, PSBs are relatively more dependent (compared to private banks) on deposits (nearly 10 percentage points higher) - on the contrary, private banks capitalize on borrowings more actively".

It also added that this 10-percentage point swing accounts for a 20-30 bps fu...