Credit growth rose to 10% in July 25 fortnight, deposit growth at 10.2%

Retail credit moderation and rising bond yields impact bank lending growth, as credit rises 10 per cent and deposits grow 10.2 per cent in the fortnight ended 25 July

Credit growth in the fortnight ended 25 July inched up to 10 per cent year-on-year (Y-o-Y), while deposits during this period continued to outpace credit growth, rising 10.2 per cent Y-o-Y, latest data from the Reserve Bank of India (RBI) showed.

 

During the same period last year, banking system credit grew 13.7 per cent, while deposits grew 10.6 per cent.

 

In the previous fortnight (11 July), credit growth stood at 9.8 per cent and deposit growth was 10.1 per cent.

 

In absolute terms, outstanding credit in the banking system stood at Rs 185.02 trillion in the fortnight ended 25 July, while outstanding deposits stood at Rs 233.50 trillion.

 

 

During the fortnight, credit rose by Rs 31,979 crore, and deposits grew by Rs 23,573 crore.

 

“The credit and deposit growth is expected to linger around similar levels. In case of credit growth, retail credit growth is cooling down across segments barring gold loans. Also, the bond market is offering better yield — this has shifted corporate credit demand away from banks. On the other hand, banks are finding it difficult to source funds due to the alternative avenues available to customers,” said Saurabh Bhalerao, Associate Director and Head — BFSI Research, CareEdge.

 

Rating agencies estimate credit growth this year (FY26) to be around 11.5–12.5 per cent, but there could be some revision to the projections.