SVB collapse: Large domestic deposits cushion Indian banks, say analysts

Mark-to-market impact on Indian banks seen limited thanks to HTM provisioning

The collapse of Silicon Valley Bank (SVB) has spooked banking stocks worldwide. With the US Federal Reserve (Fed) embarking upon an interest-rate increase spree to tame inflation, the Street fears that the SVB crisis — triggered largely due to asset-liability mismatch — is only the beginning.

Amid rout in global banking stocks, the Bank Nifty Index — a gauge for the performance of leading Indian banks — has dropped over 4 per cent in just two trading sessions.

While banking stocks will continue to remain under pressure as the SVB crisis unravels, analysts believe Indian banks’ deposit mix provides the requisite cushion.

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