Bank credit growth exceeds deposit growth in Q3 FY26

Among private banks, South Indian Bank’s total advances and deposits rose by 11 per cent and 12 per cent, respectively, to ₹ 96,765 crore and ₹ 1.18 lakh crore at the end of December. | Photo credit: REUTERS/AJAY VERMA

Punjab National Bank’s total advances grew 11 per cent year-on-year to ₹12.32 lakh crore as at end-December, while deposits rose 9 per cent YoY to ₹16.60 lakh crore. On a sequential basis, the lender’s advances increased by 5 percent and deposits increased by 3 percent.

Union Bank of India’s third-quarter advances rose 7 percent year-on-year to ₹10.16 lakh crore, and deposits rose 3 percent year-on-year to ₹12.22 lakh crore. Bank of India’s total advances rose 14 per cent to ₹7.39 lakh crore, while deposits rose 12 per cent to ₹8.87 lakh crore.

Private banks

Among private banks, South Indian Bank’s total advances and deposits rose by 11 per cent and 12 per cent, respectively, to ₹ 96,765 crore and ₹ 1.18 lakh crore at the end of December.

CSB Bank’s total loans rose 29 per cent year-on-year to ₹37,208 crore, and deposits rose 21 per cent to ₹40,460 crore. The lender’s loan against gold and gold jewelery rose 46 per cent y-o-y to ₹19,023 crore, while low-cost CASA deposits rose 3 per cent y-o-y to ₹8,316 crore.

Credit rating agency ICRA in November 2025 revised upward its projection of credit expansion in FY26 to ₹19.5-21.0 trillion (10.7-11.5 per cent) from its earlier estimate of ₹19-20.5 trillion (10.4-11.3 per cent YoY growth), supported by improved demand following rationalization of GST rates and liquidity increases through the cash reserve ratio (CRR) cuts.

While banks remain cautious in lending to non-banking financial companies (NBFCs) and corporate demand is yet to witness a meaningful revival, growth is expected to be driven by the retail and micro, small and medium enterprises (MSME) segments, ICRA said.

Published on January 2, 2026