New Delhi, Feb. 7 -- India's largest lender, State Bank of India (SBI), continues to grapple with narrowing margins as the rising cost of deposits takes a toll.

Investors who hoped for stabilisation in SBI's net interest margin (NIM) in the December quarter (Q3FY25) have been disappointed. The bank's NIM fell 21 bps year-on-year (YoY) and 13 bps quarter-on-quarter (QoQ) to 3.01% on a standalone basis.

It essentially reflects the pressure on deposit costs. Term deposits were up 13.5% YoY to Rs.30.5 trillion, but CASA was up by only 4.5% as customers shifted saving account balances to fixed deposits to take advantage of higher interest rates.

Rate cut impact

The bank's endeavour is to maintain NIM at 3% on a sustainable basis. The Reser...