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According to rating agencies, banks’ loans could grow at a pace of 12-13 per cent in FY26, with pick up seen across loan segments
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AJAY VERMA
A majority of large banks have posted higher double-digit growth in loans and deposits during Q4FY25, according the provisional figures posted on exchanges.
Country’s largest private lender HDFC Bank posted 14 per cent year-on-year (y-o-y) growth in overall deposits at ₹27.14 lakh crore, while overall advances grew 5 per cent to ₹26.43 lakh crore.
Lower advances growth is in-line with the management’s commentary that the lender would grow advances at a slower pace than banking system in FY25, grow loans on-par with banking sector in FY26, and at a faster rate than industry in FY27. This is to lower the bank’s credit-deposit (CD) ratio, which shot up after merger of erstwhile HDFC with the bank. HDFC Bank also securitised loans amounting to Rs 10,700 crore in Q4FY25 to lower CD ratio.
Overall, private banks’ advances grew 11-26 per cent (excluding HDFC Bank) and deposits rose between 12-27 per cent during Q4FY25.
PSBs numbers
Public sector banks (PSBs) including Bank of Baroda (BoB), Punjab National Bank (PNB) and Union Bank of India posted 13 per cent, 14 per cent and 9 per cent growth in overall advances at ₹12.30 lakh crore, ₹11.17 lakh crore and ₹9.82 lakh crore respectively in Q4FY25.
BoB’s overall deposits rose 10 per cent YoY to ₹14.72 lakh crore, PNB’s overall deposits were up 14 per cent at ₹15.65 lakh crore, while Union Bank’s overall deposits were up 7 per cent at ₹13.09 lakh crore.
According to rating agencies, banks’ loans could grow at a pace of 12-13 per cent in FY26, with pick up seen across loan segments
“For banks, advances are likely to grow 12-13 per cent in fiscal 2026, with a pick-up across segments. Asset quality should also be stable with gross non-performing assets ratio of ~2.4 per cent expected as on March 31, 2026, in line with fiscal 2025,” said CRISIL Ratings in a webinar on Tuesday.
India Ratings & Research, meanwhile, said the banking system credit growth could be at 13-13.5 per cent in FY26, considering possible impact from the Reserve Bank of India’s (RBI) advisory on risk weight assets in the unsecured retail segment, and slowing of credit extended to NBFCs. ENDS
Published on April 4, 2025
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