Speaking on the sidelines of the UBS India Conference 2026, Shrivastava said sentiment around private banks is finally starting to turn, after a stretch of underperformance that had investors staying on the sidelines.
“We are very positive on private banks and we are beginning to see some interest coming back,” he said, pointing to a UBS thematic report that flagged how several large private lenders are pulling ahead of peers on branch expansion done over the past three to five years.
Many of those branches, he explained, are now old enough to start paying off — and that should show up in stronger current account and savings account (CASA) growth, along with overall deposits.
That said, he wasn’t waving away the concerns entirely. Some of the bigger private banks are dealing with leadership uncertainty, and Shrivastava thinks investors will want that sorted out before committing fresh money.
Even so, he noted a clear shift from where things stood two or three months ago — sentiment is improving, valuations look reasonable, and money raised through FCNR deposits (foreign currency accounts NRIs use to park funds in India) should help fuel growth from here.
Gold-backed lending may have peaked
On NBFCs — non-bank lenders that compete with banks for loans — Shrivastava flagged an important shift underway. Gold financiers and even state-owned enterprise (SOE) banks have ridden a wave of high gold prices over the past year, with a large chunk of loan growth for SOE banks coming directly from that trend. But if gold prices cool off, he expects that tailwind to fade fast, and growth for these lenders to take a hit.
Beyond gold, though, he remains upbeat on diversified NBFCs more broadly. His reasoning: on the retail lending side, NBFCs have steadily been eating into banks’ market share across nearly every category — except housing. That’s kept them firmly on the radar for growth-focused investors looking at India.
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Auto financiers over housing lenders
Asked where he’d put money to work within NBFCs — housing, auto, or something else — Shrivastava came down clearly on the side of vehicle financing. Auto lenders have also diversified their books over the past few years, he pointed out, which makes them less exposed to the boom-bust cycles that used to define the segment.
Housing finance is a mixed bag by his account. A rate hike could help select housing lenders, but he’s steered clear of affordable housing as a theme, citing slow growth and rising competition from better-rated players.
Even in prime housing, he expects competition to stay intense, especially as banks lean on FCNR inflows to chase the same borrowers. Net-net, his preference sits with diversified and auto NBFCs over housing financiers.
PSU banks: the easy gains are behind us
On public sector banks, Shrivastava was fairly direct: much of what drove their re-rating over the past 12-15 months was cyclical, and that base effect is largely played out.
Add to that the upcoming shift to ECL (Expected Credit Loss) accounting norms — a new provisioning framework that requires banks to set aside money for potential future loan losses, not just existing bad loans — and he expects PSU banks to feel more of a hit than their better-capitalised private peers.
“We prefer private banks over SOE banks,” he summed up, adding that current valuations don’t leave much room for PSU banks given the tailwinds are fading.
For the entire discussion, watch the accompanying video
