Deposits and advances in Indian banks surged nearly threefold from FY15 to FY25, indicating a significant expansion of the banking system and increased credit facilitation, as per a report. The report by SBI Research highlighted that deposits escalated from Rs 85.3 lakh crore to Rs 241.5 lakh crore, while advances rose from Rs 67.4 lakh crore to Rs 191.2 lakh crore during the mentioned period. Bank asset growth also rebounded from 77% to 94% of GDP by FY25, showcasing a revitalized financial deepening.
Indian households are transitioning from savers to investors, with states like Gujarat, West Bengal, Madhya Pradesh, Andhra Pradesh, and Karnataka experiencing a notable shift of deposits from banks to financial markets. Over the longer period of FY5–FY25, deposits expanded from Rs 18.4 lakh crore to Rs 241.5 lakh crore, and advances grew from Rs 11.5 lakh crore to Rs 191.2 lakh crore, indicating a substantial scaling up of the banking sector. Notably, the credit-Deposit (C-D) ratio surged from 69% in FY21 to 79% in FY25, reflecting a faster pace in advances.
Public sector banks are gradually regaining market share in terms of advances after a decline since FY8, signaling a revival in balance-sheet health and renewed lending enthusiasm. In H1FY26, scheduled commercial banks saw a slight easing in incremental deposit growth to Rs 8.1 lakh crore from Rs 8.6 lakh crore in H1FY25, while credit increased to Rs 7.6 lakh crore from Rs 7.4 lakh crore. Recent reports attribute the rise in PSB profits to fee income, treasury gains, credit growth in retail and MSME segments, and normalized operating expenses.
