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Banks' Cash Surge Fuels Credit Boom
30 Oct
Summary
- Bank credit saw a 17.94% annual rise, reaching Rs 232.54 lakh crore.
- Deposits grew 16.6% year-on-year, totaling Rs 284.37 lakh crore.
- Banks boosted investments in government securities by 9.64%.
As of October 15, 2026, bank credit demonstrated robust annual growth of 17.94 percent, reaching Rs 232.54 lakh crore. This expansion notably outpaced the 16.60 percent growth observed in bank deposits, which stood at Rs 284.37 lakh crore on the same date.
The heightened credit growth is attributed to a substantial liquidity surplus within the banking system, averaging between Rs 2 lakh crore and Rs 4.5 lakh crore during the first half of October. This surplus was augmented by significant FCNR (B) deposits attracted under a Reserve Bank of India (RBI) concessional window and the increased demand characteristic of India's festive season.
Furthermore, banks augmented their holdings in central and State government securities, reporting a 9.64 percent year-on-year increase. Investments in central government securities constituted the majority of this growth. This period saw significant capital inflows, contributing to an average daily liquidity surplus of Rs 5.9 lakh crore since August 2026.
