Banks’ credit growth outpaces deposit growth in Q3 FY26

Among private banks, South Indian Bank’s overall advances and deposits rose 11 per cent and 12 per cent, respectively, to ₹96,765 crore and ₹1.18 lakh crore as at December-end. 
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REUTERS/AJAY VERMA

Bank credit growth surpassed deposit growth in Q3 of FY26, as indicated by provisional data submitted by lenders to stock exchanges.

Punjab National Bank reported an 11% year-on-year increase in total advances to ₹12.32 lakh crore by December-end, while deposits grew 9% annually to ₹16.60 lakh crore. Sequentially, advances climbed 5% while deposits increased 3% over the previous quarter.

Union Bank of India recorded a 7% annual rise in advances to ₹10.16 lakh crore, with deposits growing 3% to ₹12.22 lakh crore. Bank of India witnessed stronger momentum with advances surging 14% to ₹7.39 lakh crore and deposits expanding 12% to ₹8.87 lakh crore.

Private banks

South Indian Bank posted an 11% annual increase in advances to ₹96,765 crore, complemented by a 12% rise in deposits to ₹1.18 lakh crore as of December 31.

CSB Bank demonstrated stronger growth with total loans climbing 29% year-on-year to ₹37,208 crore, while deposits rose 21% to ₹40,460 crore. The bank’s gold-backed lending portfolio grew 46% to ₹19,023 crore, though current and savings account (CASA) deposits saw modest 3% growth at ₹8,316 crore.

Rating agency ICRA revised its FY26 credit growth projection upward to 10.7-11.5% (₹19.5-21.0 trillion) in November 2025, citing post-GST liquidity improvements and cash reserve ratio adjustments. Despite persistent caution in corporate and NBFC lending, retail and MSME segments remain key growth drivers according to the agency’s analysis.

Published on January 2, 2026