Tight liquidity situation resulted in increase in cost of funds of all commercial banks to 6.12% against 5.90% in 2011-12.
“Cost of funds of all scheduled commercial banks increased during 2012-13,” RBI said in report titled ‘A Profile of Banks: 2012-13’.
As far as state-owned banks were concerned, the cost of funds rose to 6.27% from 6.06% in 2011-12.
Rise in cost of funds had its bearing on net interest margin (NIM) or interest spread of banks, which came down to 2.79% from 2.90% a year ago.
Public sector banks earned a net interest margin of 2.57% compared with 2.76% in the previous financial year.