Axis Bank Managing Director and CEO Amitabh Chaudhry has issued a stark warning about the sustainability of India's banking system, highlighting the growing divergence between deposit and credit growth rates that threatens the sector's ability to support the country's economic expansion. Speaking at the World Economic Forum 2026 in Davos, Chaudhry emphasized that the current imbalance cannot persist indefinitely if India aims to maintain its growth trajectory.

Deposit-Credit Growth Imbalance Poses Systemic Risk

The banking sector faces a critical challenge as deposit growth remains constrained while credit demand accelerates. Chaudhry outlined the severity of this mismatch, noting that expectations for credit growth have risen significantly while deposit mobilization lags behind.

"If people are talking about credit growth of 15–17%, deposits will have to get there at some point. Both cannot diverge indefinitely," Chaudhry stated, emphasizing the mathematical impossibility of sustaining such divergent growth rates.

RBI Liquidity Support Requires Enhancement

Chaudhry acknowledged the Reserve Bank of India's commitment to providing durable liquidity but argued for more consistent intervention. He criticized the current approach, noting instances where liquidity conditions have deteriorated due to RBI market interventions. The CEO stressed that durable liquidity should mean "constant, continuous liquidity so that people can plan and act accordingly."

A significant factor contributing to liquidity tightness is the elevated government balances parked with the RBI, which Chaudhry identified as among "the highest we've seen in the recent past." This situation compounds the deposit growth challenge by reducing systemic liquidity availability.

Structural Shifts in Deposit Composition

The banking sector confronts not just slower deposit growth but also fundamental changes in deposit composition. Chaudhry highlighted a structural shift driven by increased retail participation in equity markets, which is altering the nature of deposits flowing into the banking system.

"As Indian retail investors invest more in the stock market, more of the deposits coming back into the banking system are wholesale rather than retail—and they come at a price," he explained. This shift has significant implications for bank funding costs, as wholesale deposits are market-priced and typically more expensive than traditional retail deposits.

The CEO noted that simply raising retail deposit rates would not effectively address the challenge, since "wholesale deposits are market-priced. Large depositors bid it out, and the market pays what it is willing to pay."

Foreign Investment Validates Sector but Cannot Solve Core Issues

Regarding recent foreign investments in Indian banks and NBFCs, estimated at nearly ₹15.00 billion across multiple deals, Chaudhry acknowledged the positive validation of India's financial services opportunity. However, he cautioned that capital infusion alone cannot address the fundamental funding challenge.

"Capital is important, but real balance sheet growth comes only when you get deposits in," Chaudhry emphasized, noting that financial institutions remain among the most leveraged entities globally. He pointed out that while foreign brands may be well-known internationally, they lack recognition in India, making deposit mobilization equally challenging for them.

Economic Growth Outlook and Banking System Requirements

Chaudhry expressed optimism about the IMF's recent upgrade of India's FY26 growth forecast to 7.30%, viewing it as validation of ground realities. He believes India should be capable of achieving 7-8% growth, provided the banking system can adequately support such expansion through improved deposit mobilization.

"If RBI wants the economy to grow and deliver 7.40% growth and similar numbers next year, then the economy has to be funded. That means deposits have to catch up," Chaudhry concluded, linking deposit growth directly to India's broader economic ambitions and emphasizing the critical role of banking sector health in sustaining national growth momentum.

Central Bank of India has announced the record date for its third interim dividend payment for the financial year 2025-26. The PSU institutional lender informed stock exchanges on Monday, January 19, 2026, that the board of directors has fixed Friday, January 23, 2026 as the record date for determining shareholder entitlement to the dividend payment.

Dividend Details

The bank's board approved the third interim dividend on January 16, 2026, during a meeting held in Mumbai. The dividend announcement includes specific parameters for eligible shareholders.

Investors looking to receive the dividend payment must hold shares in the bank by the predetermined record date. Every eligible shareholder will receive ₹0.20 for each share owned in the company.

Share Price Performance

Central Bank of India shares were trading at ₹38.34 as of 3:07 p.m. IST on Monday, January 19, 2026, representing a decline of 0.62% from the previous market close of ₹38.58. The bank's market capitalisation stood at ₹34,694.02 crore during the trading session.

Stock Trading Range

The PSU bank's shares have experienced significant price movements over the past year. The stock reached its 52-week high of ₹55.50 on January 20, 2025, while the 52-week low was recorded at ₹32.75 on May 9, 2025. Despite the recent dividend announcement, shares showed mixed performance with long-term gains offset by recent yearly declines.

The dividend payment represents the bank's third interim distribution for the current financial year, demonstrating the institution's commitment to returning value to shareholders through regular dividend payments.