Bulk depositors such as public sector undertakings, temple trusts and companies with huge cash surplus are making hay as some banks seem game for paying muh maangi keemat (desired price) for their deposits to bridge the gap between credit growth and deposit growth.

This is underscored by the fact that interest rates on one-year bulk deposits (₹3 crore and above) have gone up from an average 6.90-7.00 per cent level in January 2026 to about 7.50 per cent now.

Credit growth (year-on-year) of all scheduled banks at 14.88 per cent as on April 15 was 276 basis points, higher than the deposit growth of 14.88 per cent, per RBI’s latest data.

A senior executive with a public sector bank (PSB) noted that recently a renowned temple trust issued a tender for placing a single ₹500 crore deposit, which is currently earning an interest rate of about 6.80 per cent with another bank. The mountain-top temple is now believed to be seeking a return of at least 7.30 per cent.

Repo rate

Indian Bank’s MD & CEO Binod Kumar said bulk deposit rates will go up if loan growth continues to grow at a faster clip than deposit growth, assuming the repo rate remains static. Ultimately, banks may also have to increase retail term deposit rates.

Kumar expects his bank to maintain the bulk deposit proportion at about 20 per cent of overall deposits.

K Arvind, Head – Treasury, Tamilnad Mercantile Bank, said: “One year bulk deposit rates have gone up from 6.90 to 7.00 per cent level in January 2026 to the current level of about 7.50 per cent. Though the repo rate has come down, bulk deposit rates have not come down as banks have to mobilise resources to support credit growth.”

According to the RBI’s latest data, during the current easing cycle (February 2025 to February 2026), the repo rate has been cumulatively cut by 125 basis points (bps) from 6.50 per cent to 5.25 per cent, but the transmission has not happened to the full extent.

The weighted average domestic term deposit rate on fresh and outstanding deposits have come down by 97 bps and 47 bps, respectively. The PSB executive quoted above said institutional depositors are exploiting the need of banks to mobilise deposits to the hilt.

Published on May 7, 2026

Shares of One 97 Communications, which operates Paytm, settled 8 per cent higher on Thursday after the company reported a turnaround to profit in the March quarter and posted strong revenue growth driven by payments and financial services businesses.

The stock climbed to an intraday high of ₹1,197.40 on the NSE before closing at ₹1,197.40 compared to the previous close of ₹1,110.60.

The company reported a consolidated profit of ₹183 crore for the quarter ended March 2026, compared with a loss of ₹545 crore in the corresponding period last year.

Consolidated revenue from operations rose 18.4 per cent y-o-y to ₹2,264 crore in Q4 FY26 from ₹1,912 crore a year earlier.

For the full financial year FY26, the company posted a consolidated profit of ₹552 crore against a loss of ₹663 crore in FY25. Annual revenue from operations increased 22.2 per cent to ₹8,437 crore from ₹6,900 crore in the previous fiscal.

Speaking at the Q4 earnings call, Paytm President and Group CFO Madhur Deora said the company prefers a partnership-driven model where Paytm manages distribution, technology and collections, while lending partners handle capital and risk management. He added that Paytm is “not super excited” about going for an NBFC licence, reinforcing its focus on collaborating with established financial institutions.

Brokerages said the company’s improving profitability, resilient payments business and continued momentum in financial services supported investor sentiment despite the absence of UPI incentive income.

Goldman Sachs has maintained a positive outlook on Paytm, highlighting its strong growth in digital payments and financial services. It has retained a buy rating with a target price of ₹1,400. The brokerage expects Paytm’s EBITDA margins to improve steadily over the next few years. “We see scale up of recently launched postpaid product, further gains in market share, and new launches (such as wallets) as potential catalysts for the stock,” it added.

Citi maintained a buy rating with a target price of ₹1,375. The brokerage said Q4 core payment margins excluding subsidies continued to improve, while merchant business momentum remained robust. It noted that profits and EBITDA missed estimates due to higher marketing spends as the company stepped up promotional activity, but added that operating leverage continues to play out with fixed costs remaining under control.

Jefferies also maintained a buy rating with a target price of ₹1,350. The brokerage said revenue momentum helped offset the absence of PIDF and UPI incentives, with growth led by the financial services business. It added that contribution margins are normalising, while operating efficiency helped adjusted EBITDA margins improve to 8 per cent.

On the other hand, Bernstein maintained an outperform rating with a target price of ₹1,500. The brokerage said Paytm’s Q4 FY26 EBITDA was broadly in line with consensus estimates at ₹1.3 billion and highlighted resilient profitability despite the loss of PIDF incentives and the absence of UPI incentive accrual during the quarter. It said financial services revenue grew 12 per cent q-o-q and 38 per cent y-o-y, driven by merchant lending traction.

The brokerage added that UPI volumes surged 46 per cent y-o-y compared with industry growth of around 21 per cent, indicating improving engagement. Device additions remained steady at around 0.7 million during the quarter, easing concerns around competitive intensity. Bernstein also noted that indirect expenses remained tightly controlled, while payments margin declined 9 basis points due to the discontinuation of PIDF incentives. It expects non-linear EBITDA expansion over FY26-30, supported by more than 20 per cent revenue growth and disciplined costs.

Published on May 7, 2026