Banks see double-digit credit growth in Q3 FY26 on strong lending

Six banks reporting Q3 FY26 business updates recorded double-digit year-on-year growth in advances, while deposit growth also remained healthy across public and private lenders

Six banks that reported their quarterly business updates for the October-December (Q3FY26) quarter on Friday recorded double-digit growth in their loan books compared with a year ago. Deposits also posted healthy growth during the period.

 

State-owned Punjab National Bank reported a 10.15 per cent year-on-year (Y-o-Y) rise in domestic gross advances to ₹11.68 trillion in Q3FY26 from ₹10.60 trillion a year earlier. Bank of India posted a 15.07 per cent Y-o-Y increase in advances to ₹6.29 trillion from ₹5.46 trillion, while UCO Bank’s advances grew 17.5 per cent Y-o-Y to ₹2.15 trillion.

 

Among private sector lenders, South Indian Bank reported an 11.3 per cent Y-o-Y increase in advances to ₹96,765 crore. In an exchange filing, the bank said that during the quarter ended December 31, it wrote off ₹900 crore. “Had this not been done, the Y-o-Y growth as on December 31, 2025, would have been 12.43 per cent,” it said. 

 

Tamilnad Mercantile Bank posted a 16.3 per cent Y-o-Y rise in advances to ₹50,763 crore. CSB Bank reported a sharp 29 per cent Y-o-Y increase in advances to ₹37,208 crore, with nearly half of its loan book coming from advances against gold and gold jewellery (excluding receivables secured against gold), which stood at ₹19,023 crore, up 46 per cent from a year ago. 

Deposits also saw robust growth. UCO Bank’s deposits rose 10.91 per cent Y-o-Y to ₹2.92 trillion, while Punjab National Bank’s domestic deposits increased 8.32 per cent to ₹15.97 trillion as of December 31, 2025. Bank of India reported a 12.8 per cent Y-o-Y rise in deposits to ₹7.65 trillion.

 

Among private sector banks, South Indian Bank’s deposits grew 12.17 per cent Y-o-Y to ₹1.18 trillion, and Tamilnad Mercantile Bank recorded a 12.53 per cent increase to ₹56,707 crore. CSB Bank reported a 21 per cent Y-o-Y rise in deposits to ₹40,460 crore as of December 31, 2025.