BNP Paribas analysts expect reasonable credit growth to translate into earnings growth momentum for banks in FY27 – a key catalyst for rerating | Photo credit:
In the fortnight ended December 31, 2025, deposits of all scheduled banks increased by ₹7,34,623.39 crore. Loans also increased by ₹6,32,756.50 crore.
In the previous two weeks ending December 15, 2025, deposits of all scheduled banks fell by ₹1,66,460 crore, while loans rose by ₹1,08,415 crore.
Bankers attribute the sudden increase in turnover (deposits plus advances) to the quarter-end phenomenon where banks increase their balance sheets by entering into short-term contracts.
Referring to the YTD CY (year-to-date calendar year) 2025 incremental Credit-Deposit Ratio of 96 percent, BNP Paribas said in a report that this indicates a relative increase in credit strength. Furthermore, slightly lower deposit/M3 (broad money) growth reflects the same dynamics that have caused liquidity problems over the past two months.
BNP Paribas analysts expect reasonable credit growth to translate into earnings growth momentum for banks in FY27 – a key catalyst for rerating.
Published on January 14, 2026
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