New Delhi, Aug. 27 -- The number that defined India's banking sector in Q1 FY27 was not the one in the profit column. It was 3.26 percent - HDFC Bank's net interest margin for the three months ended June 30, 2026, the lowest in the institution's recorded history. That contraction, from 3.38 percent in the March quarter, sent analysts back to their models on a morning when India's largest private bank had just reported a 5 percent profit rise and gross advances growing 15.4 percent. Something in the arithmetic was not resolving.

fast loan growth, the cleanest book in a generation - was the structural backdrop against which HDFC Bank's compressed NIM looked less like a warning and more like the mechanics of a competitive deposit market run...