New Delhi, Feb. 11 -- The government, in the Union Budget 2026, proposed a record gross market borrowing of Rs.17.2 lakh crore for the next fiscal year, which came in higher than market expectations. The announcement also sent the yield on India's 10-year G-Sec to a one-year high on 2 February.

Though yields have cooled off in the subsequent sessions, they remain at an eleven-month high of 6.7%, even after cumulative rate cuts of 125 basis points in the repo rate.

While the higher yields could put pressure on banks' treasury portfolios, especially in state-owned banks that maintain large portfolios of government securities, analysts have said the impact could be limited, noting that stronger core credit growth and improving margins can ...