Banking & Finance Sector: The Complete Story 2026
Hello firends lets Deep dive Banking & Finance Sector: The Complete Story Wise Investing · Data as of 24 October 2026 · Based on Q2 FY27 results (July–September 2026) The story in one line: India's banks are in their best shape in a decade and lending is booming, but profit growth is lagging loan growth and the RBI has just turned from cutting rates to raising them. 1. How the system works A bank is a middleman. It takes deposits, lends them out at a higher rate, and keeps the spread. That spread, measured against assets, is the Net Interest Margin (NIM) . Two things eat into it: the interest paid to depositors and the provisions set aside for loans that go bad (NPAs). A capital buffer (CRAR) absorbs shocks. Money flows through these layers: RBI sets the repo rate, which is the price of money for everyone below it. Banks: PSU (SBI, PNB, Canara), private (HDFC, ICICI, Axis, Kotak) and small finance banks. NBFCs and housing finance companies (Bajaj Finance) borrow fr...