Mid, small sized private banks' credit growth outpace deposit in FY26

Advances at select mid- and small-sized private banks grew faster than deposits in FY26, reflecting tighter funding conditions across the sector

Three small and mid-sized private sector lenders — South Indian Bank, Karur Vysya Bank, and Tamilnad Mercantile Bank — have seen growth in advances outpace growth in deposits in 2025–26, data released by the lenders showed.

 

South Indian Bank has seen 15.66 per cent year-on-year (YoY) growth in gross advances to ₹1.01 trillion as on March 31, 2026, while deposit growth of the bank rose 14.71 per cent YoY to ₹1.23 trillion.

 

Karur Vysya Bank’s advances grew by 16.87 per cent YoY to ₹98,743 crore and deposit growth was 13.31 per cent YoY to ₹1.16 trillion.

 

Tamilnad Mercantile Bank’s total advances were up 20.32 per cent YoY to ₹53,380 crore and deposits grew by 14.94 per cent YoY to ₹61,712 crore from ₹53,689 crore as on March 31, 2025.

   

According to the latest data released by the Reserve Bank of India, commercial banks’ credit growth was 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.