New Delhi, Dec. 12 -- India's banking sector continues to face pressure from weak deposit mobilisation, even as loan growth remains relatively healthy, according to a latest sector report by Kotak Institutional Equities.

The report flags sluggish household deposit accretion and muted growth in low-cost deposits as the key structural challenges for banks in the current cycle.

While deposits have broadly grown in double digits, momentum has failed to keep pace with credit growth.

The report said the household deposits, which account for nearly 60% of total banking system deposits, grew about 10% year-on-year, showing little improvement from previous quarters.

Growth remains tilted towards term deposits rather than savings accounts, high...