Mumbai, Oct. 6 -- Indian banks reported stronger loan and deposit growth in the September quarter, but the underlying pace of deposit expansion was softer at several large private lenders after excluding the boost from FCNR-B inflows, according to a Jefferies report.

"Pre-Qtr releases of select Indian banks show healthy loan & deposit growth, reflecting buoyant core & lift from FCNR-B raising," Jefferies said.

The brokerage said the headline numbers were partly supported by foreign-currency deposits, while underlying trends were more moderate.

"Core loan growth (ex FCNR-B) trends were stable, and banks have partly used FCNR-B deposits to repay high-cost deposits & improved LCR, so adjusted deposit growth is slightly softer but of bette...