New Delhi, July 18 -- Indian banks are entering FY27 with a strong combination of robust credit demand, improving deposit mobilisation, benign asset quality, and potential monetary policy support, setting the stage for sustained earnings momentum, according to a research report by Ashika Institutional Equities.

The brokerage said that the banking sector is expected to benefit from broad-based loan growth, additional foreign currency deposit inflows, and a possible recovery in net interest income, although deposit costs and MSME asset quality will remain key monitorables.

"Banking system's non-food credit growth and deposit growth improved to 18.6 per cent YoY and 13.3 per cent YoY, respectively, as on June 30, 2026," the report said, ad...