₹10 lakh crore liquidity surplus: Why FCNR-B inflows could push bank funding costs lower, says Jefferies

India’s banking system is facing a sharp liquidity surplus of nearly ₹10 lakh crore, driven partly by strong FCNR-B inflows, which could keep short-term interest rates under pressure. Jefferies expects falling money-market rates and easier liquidity conditions to help banks lower wholesale funding costs, although near-term NIMs may remain under pressure.