Credit growth outpaces deposit mobilisation in June as loans rise 19%, deposits 13%
Economic Times 1 hr ago·30 Jul 2026, 9:31 am
Indian banks are seeing a surge in credit growth that is outpacing the increase in deposits. In June, the total value of outstanding loans grew by 19% year-on-year, reaching Rs 219.3 lakh crore. Meanwhile, the total amount of deposits increased by 13% to Rs 265.4 lakh crore. This widening gap suggests that banks are lending more aggressively than they are currently collecting in new savings.
For investors, this trend is significant as it indicates a potential strain on the liquidity of the banking sector. A large gap between credit and deposits can force banks to rely more on wholesale funding, which can be costlier and riskier. It also reflects a strong demand for credit from businesses and consumers, which is a positive sign for economic activity.
Investors should watch for upcoming data on the Net Interest Margin (NIM) and the cost of funds. If the gap continues to widen, banks may need to raise deposit rates to attract more savings, which could compress their profitability. Monitoring the pace of deposit mobilisation will be key to assessing the financial health of the banking system.
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