PSU banks begin FY27 with strong loan growth; deposits trail

Public sector banks kicked off FY27’s first quarter with solid performance, posting double‑digit advances growth, while deposit gathering lagged behind the loan surge.

Retail lending continued to be the main driver of growth, even though low‑cost CASA deposits faced pressure.

According to PTI‑compiled provisional figures for nine of the twelve public‑sector banks covering the June‑30 quarter, loan expansion varied from roughly 12 % to almost 29 % YoY, while deposit growth fell between 3.5 % and 16 %, indicating strong credit appetite despite a sluggish liability build‑up.

Leading lenders showed mixed results: Bank of Baroda recorded a 17.4 % YoY rise in global advances versus a 13.8 % deposit increase, and Bank of India posted 18.64 % loan growth alongside a 14.92 % deposit gain.

Punjab National Bank’s advances climbed 12.85 % YoY, while deposits rose 8.5 %.

Canara Bank posted 18 % loan growth and an 11.7 % deposit increase; Indian Bank logged 13.9 % loan growth and a 13.3 % deposit rise.

Central Bank of India led the pack with the strongest advance growth, up 28.8 % YoY, while its deposits expanded 11.7 %.

UCO Bank saw advances up 21.3 % and deposits up 11 %; Punjab & Sind Bank recorded 19.5 % loan growth and a 12.2 % deposit increase.

Union Bank of India highlighted weak deposit mobilisation, with deposits rising only 3.5 % YoY despite a 12.5 % advance increase.

Retail, agriculture and MSME (RAM) loans kept propelling credit expansion across the banks.

Canara Bank topped the list with domestic RAM advances up 21.3 % YoY, trailed by Bank of India at 19.7 % and Bank of Baroda at 18.5 %; Indian Bank’s RAM book grew 14.8 % and Union Bank’s rose 11.56 %.

The quicker lending growth relative to deposits pushed credit‑deposit ratios higher at multiple lenders.

Punjab National Bank’s global credit‑deposit ratio climbed to 73.92 % from 71.1 % a year earlier, and UCO Bank’s ratio increased to 82.15 % from 75.38 %.

Union Bank’s domestic credit‑deposit ratio jumped sharply above 83.38 %.

Low‑cost deposit pressure continued; Union Bank’s CASA ratio slipped slightly to 35.10 % from 35.51 % a year earlier, and Central Bank of India’s CASA ratio dropped to 46.61 % from 46.88 %.

Indian Bank’s domestic CASA ratio eased to 39.64 % from 39.67 % at end‑March.

Published on July 5, 2026