New Delhi, July 15 -- Lending and deposit rates are expected to moderate gradually in the coming months as high-cost legacy deposits mature and liquidity conditions remain comfortable, although competition for retail deposits and banks' efforts to protect margins are likely to keep the pace of decline measured, according to a CareEdge report.

"Going forward, lending and deposit rates are expected to moderate gradually as legacy high-cost deposits continue to mature and liquidity remains comfortable. However, competition for retail deposits, banks' focus on margin preservation and the pace of deposit repricing are likely to keep movements in both fresh and outstanding spreads relatively modest in the near term," the report said.

The repo...