New Delhi, Sept. 1 -- Inflows through foreign currency non-resident bank (FCNR-B) deposits and external commercial borrowings (ECBs) are likely to support banks' funding needs at reasonable costs, benefiting large private/public sector banks and foreign lenders, while net interest margins (NIMs) are expected to remain range-bound, according to a Capital 360 One report.

The report noted that incremental spreads for private sector banks (PVBs) improved month-on-month in July 2026, as fresh weighted average term deposit rates (WATDDR) declined by 25 basis points (bps), compared with a 27-bps increase in June. However, WATDDR remained unchanged for public sector banks (PSBs), after rising 7 bps in June.

A weighted average term deposit rate ...