Bank Credit Growth Surges By 16 Per Cent In FY26, Beats Deposit Growth

Bank lending has shown a higher growth rate than deposits in FY26, indicating sustained credit growth across all sectors. The Reserve Bank of India (RBI)'s latest findings have revealed that bank credit has grown 16 per cent year-on-year (YoY) to stand at Rs 219 lakh crore as on March 31, 2026.

However, deposit growth stood at 13.4 per cent to reach Rs 267.8 lakh crore as of March 31, 2026. This margin clearly depicts that banks have maintained the pace of deploying money in the banking system, backed by credit demand from retail borrowers, industries and the service sector.

On a yearly basis, deposits have increased by Rs 31.7 lakh crore, whereas credit has increased by Rs 30.1 lakh crore. The close gap in absolute growth indicates the sustainable funding of lending growth by banks; the pace difference persists.

Year-End Momentum Boosts Numbers

It is to be noted that a substantial growth has taken place at the end of the financial year. In the last two weeks of March 2026, banks had mobilised Rs 12 lakh crore worth of deposits and provided Rs 6.1 lakh crore of lending.

This pattern was consistent in previous years. When cash flows increase, companies tend to temporarily hold excess cash with banks at the end of the year, whereas government expenditures tend to increase in the last quarter. Banks also encourage lending to achieve annual targets, and this boosts credit growth in this season.

Consequently, deposits and credit numbers are prone to spike in March, leading to stronger year-end data than the previous months.

Growth Moderates In Investments

While lending has remained strong, banks have been more cautious in their investment activities. The investments have increased 4.7 per cent annually to Rs 71.4 lakh crore.

The low growth rate of investment indicates cautious balance sheet management. Banks have been shifting their portfolios according to liquidity situation and the rate of interest movements by deciding to focus on lending rather than investing in some of the segments.

Base Effect

A look at last year’s base highlights the scale of growth. By the beginning of April 2025, bank credit was at Rs 188.7 lakh crores, and deposits were at Rs 236.2 lakh crores.

Comparing the two levels shows that credit growth has continued despite occasional liquidity issues during the past year. Deposits have shown relatively slower growth, which becomes one of the main concerns for banks when it comes to funding. Overall, the data points to a system where credit expansion has stayed robust, supported by economic activity, while deposit mobilisation has remained steady but slightly slower in comparison.