The battle of surging interest rates is continuing since a long time now. In the period between March 2010 to August 2011, the Reserve Bank of India has raised policy rates by as much as 325 bps. Also savings bank rates were raised to 4% this fiscal.

In response to this pressure, how well have public sector as well as private sector banks faired?

Both these bank classes have shown a decline in terms of net interest margin (NIM). The dip in NIM has been from 3.3% in Q1 to 3.1% in Q2 of this fiscal.

Also there has been a rise in the level of NPAs from 2.01% to 2.10% for the same period as above.

In terms of CASA ratio, private sector banks had a higher share of 34.25% as against 31% for the public sector counterparts.

Similarly credit deposit ratio was 83% for private banks while it was 72% for public sector ones.