Bank Credit Growth Surpasses Deposit Mobilisation in FY26
Credit growth outpaces deposit mobilisation in FY26 despite easing
Business Standard
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In FY26, bank credit growth reached 16.08%, outpacing deposit growth of 13.47%, reflecting ongoing funding pressures for lenders. This trend marks a significant recovery from the pandemic years when credit growth was much lower, indicating a rebound in credit demand.
- 01Bank credit grew by 16.08% in March 2026, compared to 11.03% the previous year.
- 02Deposit growth improved to 13.47%, up from 10.28% in March 2025.
- 03The gap between credit and deposit growth remains significant despite improvements.
- 04Credit growth peaked at 20.16% in March 2024, highlighting the volatility in lending demand.
- 05Post-pandemic, credit demand has rebounded faster than deposit growth.
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In FY26, bank credit growth outpaced deposit mobilisation, with bank credit increasing by 16.08% in March 2026 compared to 11.03% a year earlier. Deposit growth also saw an improvement, rising to 13.47% from 10.28% in March 2025. Despite these gains, the gap between credit and deposit growth remains significant, indicating persistent funding pressures for lenders. Notably, credit growth peaked at 20.16% in March 2024, reflecting a strong recovery in credit demand following the pandemic years, when credit growth fell sharply to 6.14% in March 2020 and 5.60% in March 2021. The trend reversal post-pandemic has led to a faster rebound in credit demand compared to deposit growth.
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The ongoing disparity between credit and deposit growth suggests that borrowers may face tighter lending conditions, potentially leading to higher interest rates on loans.
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