The share of Indian banks' borrowings will continue to rise gradually within their overall funding mix if they struggle to attract sufficient fresh deposits to support loan growth, Fitch Ratings has said. The recent sharp rise in the loan-to-deposit ratio (LDR) could become a structural issue if low returns on deposits amid inflationary pressures - and evolving depositor preferences - hinder long-term deposit growth, the rating agency has said. “Bank deposit rates have been slow to respond to the sharp 250 basis points increase in policy rates during the financial year ended March 2023, with term deposit rates to fully reflect this change as of the June quarter,” the rating agency said. The return on low-cost deposits remains unchanged, leading to their share in new deposits hitting a two-decade low of 20% in FY24, according to Fitch's estimate.