Credit growth outpaces deposit mobilisation in FY26 despite easing

Bank credit growth continued to exceed deposit mobilisation in FY26, highlighting persistent funding pressures for lenders despite a year-on-year improvement in both metrics

Bank credit growth continued to outpace deposit mobilisation in FY26, underscoring persistent funding pressures for lenders even as both metrics saw an uptick on a year-on-year (Y-o-Y) basis. Data shows bank credit grew 16.08 per cent in March 2026, compared with 11.03 per cent a year ago. Deposit growth also improved to 13.47 per cent from 10.28 per cent in March 2025. Despite the acceleration in deposits, the gap between credit and deposit growth remained elevated. Credit growth peaked at 20.16 per cent in March 2024, significantly outpacing deposit growth of 13.47 per cent. While credit expansion moderated in FY25, it remained higher than deposit accretion. Credit growth slowed sharply during the pandemic years, falling to 6.14 per cent in March 2020 and 5.60 per cent in March 2021, even as deposits saw relatively stronger growth due to precautionary savings. The trend reversed post-pandemic, with credit demand rebounding faster than deposit growth.