Credit growth was broad-based across sectors and borrower categories

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Anirudh Parthasarathy 10914@Chennai

Scheduled commercial banks (SCBs) reported robust growth in both credit and deposits in June 2026, reflecting sustained economic activity and healthy savings mobilisation. According to the Reserve Bank of India’s (RBI) Quarterly Basic Statistical Returns (BSR), bank credit expanded 16.5 per cent year-on-year at end-June 2026, sharply higher than 9.9 per cent a year ago, while deposit growth remained steady at 11.5 per cent.Credit growth was broad-based across sectors and borrower categories. Lending to private corporates accelerated to 21.1 per cent, while credit to households and the public sector grew 15.2 per cent and 14.6 per cent, respectively. Loans to trade (18.1 per cent) and finance (22.4 per cent) outpaced overall credit growth, and lending to female individual borrowers rose 19.7 per cent. The weighted average lending rate eased to 9.26 per cent from 9.71 per cent a year earlier, with nearly two-thirds of loans carrying interest rates below 9 per cent.On the liabilities side, deposits with SCBs grew 11.5 per cent, with rural and semi-urban branches registering faster growth than the overall banking system. The household sector remained the dominant source of deposits, accounting for 58.8 per cent of the total and nearly 99 per cent of incremental deposits during the quarter. Term deposits continued to drive deposit mobilisation, increasing 12.9 per cent year-on-year, well above the growth in savings deposits (10.6 per cent) and current deposits (5.3 per cent).The data also indicate the impact of lower interest rates. More than two-thirds (66.7 per cent) of term deposits carried interest rates below 7 per cent in June 2026, compared with 35 per cent a year earlier. Deposits with maturities of one to three years constituted about 70 per cent of total term deposits, highlighting depositors’ preference for medium-term savings instruments.Meanwhile the term deposits of size ₹1 crore and above’ accounted for 47.3 per cent of the total term deposit as at end June 2026, of which 35.7 per cent came from the deposits of size ₹5 crore and above.Published on August 31, 2026