Bank credit growth slows to 13.8% in March 15 fortnight, deposits rise

Bank credit growth eased to 13.8 per cent in the March 15 fortnight, while deposit growth improved to 10.8 per cent, reflecting tax outflows and seasonal lending trends

Banking credit grew by 13.8 per cent year-on-year (YoY) in the fortnight ended March 15, lower compared to 14.5 per cent YoY growth recorded in the previous fortnight. On the other hand, deposits saw 10.8 per cent YoY growth in the fortnight compared to 10.2 per cent YoY in the previous fortnight, RBI data showed.

 

In the March 15 fortnight, credit grew by 0.1 per cent or Rs 18,672 crore. In comparison, credit grew by 1.6 per cent or Rs 3.22 trillion in the previous fortnight. 

Deposits contracted by 0.7 per cent or Rs 1.78 trillion compared to growth of 1.7 per cent or Rs 4.16 trillion seen in the previous fortnight. 

 

According to analysts, deposits have shrunk on a fortnightly basis, possibly due to advance tax outflows. Credit growth has been moderate. However, there might be some higher lending activity in the second half of March as banks tend to accelerate their lending towards the end of the quarter and year-end.

 

“The change in banks reporting fortnightly balance-sheet data is having an impact on the credit and deposit growth shown. The outflows for advance tax payments are impacting deposit growth on a fortnightly basis, as March 15 is the due date for tax payments,” said Saurabh Bhalerao, associate director, BFSI, CareEdge Ratings.

 

On an absolute basis, banking credit in the system stood at Rs 207.70 trillion, while deposits in the system stood at Rs 250.12 trillion.

 

Earlier, banks reported their statement of position on every alternate Friday. However, from December, the RBI replaced that with a rotating schedule with fixed calendar cut-offs. Lenders have to report data as on the 15th and the last day of each month and, if the fortnight ends on a holiday, banks report the previous working day’s data.

 

This change is part of amendments to banking laws. In the Banking Regulation (Amendment) Rules 2025, Rule 15B was omitted, and sub-clauses in reporting forms were updated to shift frequency from ‘alternate Fridays’ to fixed dates.