Neutral impactEconomy
Credit growth continues to outpace deposit mobilisation in August as loans rise 20%, deposits 18%
Economic Times 2 hrs ago·28 Sept 2026, 5:49 am
Indian banks are seeing a significant gap widen between their lending and deposit activities. In August, loan growth accelerated to 20% year-on-year, outpacing the 18% rise in deposits. This divergence means banks are borrowing more from the market to fund their lending, rather than relying solely on customer savings.
For investors, this trend highlights the ongoing strength of credit demand in the economy. It suggests that businesses and individuals are actively seeking financing, which supports the broader financial sector. However, it also implies that banks may need to manage their liquidity carefully to maintain stability as they expand their balance sheets.
Investors should watch for upcoming monetary policy decisions and quarterly earnings reports. These will provide clarity on whether banks can sustain this high loan-to-deposit ratio and how they plan to manage their funding costs in the coming months.
Excerpt from Economic Times
Published On Sep 28, 2026 at 11:19 AM IST Outstanding loans across scheduled banks grew by 20 per cent YoY to Rs 223.9 lakh crore in August 2026, outpacing the 18 per cent growth in deposits, which stood at Rs 278.7 lakh crore, according to RBI data analysed by Lattice. On a sequential basis, bank credit increased by…Read the original at Economic Times
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