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India Banks See Fastest Deposit Growth in a Decade
13 Aug
Summary
- Bank deposits grew 15.4% year-on-year, fastest in nearly 10 years.
- Overseas Indians deposited $37 billion in foreign currency accounts.
- Bank credit growth accelerated to 19.4%, driven by corporate demand.
Bank deposits in India have recorded their fastest annual growth in nearly ten years, reaching a 15.4% increase by the end of July. This significant rise was substantially bolstered by overseas Indians, who deposited about $37 billion into foreign currency-linked non-resident accounts.
The Reserve Bank of India's special window, introduced in June, has attracted nearly $41 billion in total inflows by July 31. The FCNR-B deposits alone accounted for $36.72 billion, surpassing the $26 billion mobilized in a similar 2013 scheme. This scheme is set to continue until September 30, 2026.
Concurrently, bank credit growth also accelerated to 19.4% by July, marking its quickest pace since June 2024. This expansion was primarily driven by renewed corporate demand, as higher bond yields encouraged companies to seek bank loans. Additionally, banks increased lending to the MSME sector through government-backed financial assistance programs.
