Indian Banks Deploy QR Infrastructure to Capture Business Deposits Amid Slowing Growth

A cohort of Indian state-run and mid-sized lenders are strategically investing in proprietary Quick Response (QR) code payment infrastructure. This move aims to attract current account balances from small and medium-sized enterprises (SMEs), secure cash management mandates, and cultivate new lending opportunities within the business segment. The initiative reflects a proactive response by these banks to the broader industry trend of decelerating deposit growth. Traditionally, current accounts, which are non-interest-bearing, provide banks with a cost-effective source of funds, contributing significantly to their Net Interest Margins (NIMs). By offering their own QR solutions, banks bypass reliance on third-party payment platforms, potentially reducing transaction costs and enhancing their direct relationship with business clients. This direct engagement is crucial for identifying and capitalizing on cross-selling opportunities, particularly in lending, a key revenue driver. The increasing adoption of digital payments in India, propelled by platforms like the Unified Payments Interface (UPI), has reshaped the financial landscape. By integrating QR capabilities directly into their offerings, banks are not only facilitating easier transactions for businesses but also embedding themselves deeper into the operational cash flows of SMEs. This strategic shift underscores a competitive push to differentiate services and secure a larger share of the lucrative business banking market, especially as overall deposit expansion moderates across the Indian banking sector.