New Delhi, Jan. 27 -- India's banks are in a strong position on the back of adequate capitalisation, healthy asset quality, steady demand for credit and inroads into digitalisation. All public sector banks, barring a couple, improved their capital adequacy ratios in FY24 from levels in FY22.

However, a key pain point for banks in 2024 was deposit mobilisation, which continues to fall short of growth in advances, leading to liquidity constraints. While this gap narrowed in October and November, credit growth once again outpaced deposit growth in December.

Some incentives for retail bank deposits could improve the ability of lenders to garner such funds and support the supply of credit, said Sachin Sachdeva, vice president, sector head - ...