An analysis of banks' balance sheets by Care Ratings has found that banks' net interest margin (NIM) increased by 46 basis points to 3.3% in Q1 2023. This growth in NIM led to a 29.5% increase in net interest income for lenders during the period. The better NIM was driven by slower deposit rate resetting and the anticipated rise in deposit rates due to the withdrawal of Rs 2,000 banknotes in May was expected to be counterbalanced.
