At 15.4%, bank deposit growth highest since December 2016: RBI data

Growth in bank deposits accelerated to 15.4 per cent year-on-year (Y-o-Y) as of July 31, the highest level since December 2016, according to data released by the Reserve Bank of India (RBI). 

  Aggregate deposits increased by Rs 6.61 trillion during the fortnight ended July 31, taking the outstanding deposit base to Rs 269.41 trillion. The increase translated into a 2.5 per cent rise during the fortnight.

  Time deposits accounted for Rs 4.21 trillion of the fortnightly increase, while demand deposits rose by Rs 2.40 trillion.

The sharp increase in deposits came as banks continued to mobilise foreign currency deposits under the RBI’s special FCNR (B) swap facility. Banks had mobilised $36.7 billion through FCNR (B) deposits under the facility by July 31, according to the RBI.

  In June, the RBI introduced the facility for fresh foreign currency non-resident (bank), better known as FCNR (B), deposits with a maturity of three to five years, with the central bank bearing the full hedging cost for eligible deposits. For the financial year so far, aggregate deposits increased by Rs 7.13 trillion, compared with Rs 7.69 trillion during the corresponding period of 2025-26.

  Time deposits have risen by Rs 9.70 trillion during the period, while demand deposits have declined by Rs 2.58 trillion.

  The pickup in deposit growth came alongside faster credit growth. Bank credit grew 19.3 per cent Y-o-Y as of July 31, compared with 17.7 per cent as of July 15. Credit growth is the highest since May 2024.

  Bank credit increased by Rs 3.43 trillion during the fortnight to Rs 220.78 trillion. In FY27 so far, credit has increased by Rs 7.18 trillion, compared with Rs 2.57 trillion during the corresponding period of the previous financial year.

  The gap between credit and deposit growth stood at 3.95 percentage points as of July 31, narrowing from 4.98 percentage points a fortnight earlier.