Veteran Indian banker Neeraj Gambhir, Executive Director at Axis Bank, has called for innovative funding tools as Indian banks grapple with slowing deposit growth amid a surge in loan demand. Speaking to Bloomberg on March 16, 2026, Gambhir highlighted the challenge of convincing equity-focused investors to park money in traditional bank deposits rather than stocks. He advocated for options like shorter-tenure plain vanilla bonds to diversify funding sources beyond deposits.

India's banking sector faces a credit-deposit mismatch, with the credit-deposit ratio hitting a record high last month due to robust loan growth outpacing deposit inflows. This shift stems from the country's financialization boom, where savers increasingly favor equity markets over fixed-income bank savings amid strong stock market performance. Banks have urged the Reserve Bank of India (RBI) to ease liquidity norms to manage the imbalance.

Gambhir, with over 25 years in fixed income, forex, and capital markets, brings deep expertise from stints at Nomura India, Lehman Brothers, and ICICI Bank before joining Axis Bank. As a key figure in industry bodies like the Fixed Income and Money Market Dealers Association, he has influenced debt market development and public debt management initiatives. His comments reflect broader concerns in India's banking sector navigating post-pandemic credit expansion.

Also Read: Kremlin Silent on Khamenei's Moscow Treatment Claims

The deposit crunch comes as India's economy grows steadily, with retail and corporate lending fueling expansion but straining liability franchises. Banks have raised deposit rates incrementally, yet competition from mutual funds and direct equity investments persists. Gambhir's push for bond market alternatives aligns with RBI efforts to deepen corporate debt markets and reduce over-reliance on deposits.​​

With Gambhir's appointment to Axis Bank's board in late 2025, his insights carry weight in shaping wholesale banking strategies. Analysts see potential in infrastructure bonds and securitization to bridge the gap, though regulatory guardrails remain key. As deposit mobilization lags, banks must balance growth with liquidity to avoid systemic risks in the coming quarters.

Industry observers note that while loan books swelled 15-20% last year, deposit growth hovered below 12%, prompting calls for structural reforms. Gambhir's timely intervention underscores the need for diversified funding amid India's equity bull run. Banks await RBI's next moves on liquidity and bond issuance frameworks to stabilize the sector.

Also Read: Mumbai Man Kills Wife After Argument By Pushing Her in Front of Local Train