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Credit momentum accelerates further, deposit traction yet to catch-up

ICICIdirect Research 12 Jun 2026 DISCLAIMER

As per RBI fortnightly data, bank credit growth accelerated to 17.4% YoY as of May 31, 2026, the strongest pace in nearly two years, with outstanding credit reaching ₹220 lakh crore, driven by strong corporate lending, robust momentum in NBFC credit and healthy retail demand. Deposit growth, however, remained relatively slower at 12.1% YoY with outstanding deposits at ₹265 lakh crore, indicating that credit demand continues to outpace liabilities accretion despite ongoing geopolitical uncertainties.
Separately, RBI’s sectoral deployment of credit data for April 2026 indicated that growth remained broad-based across key segments. Continued strong traction in NBFC (+27.7% YoY) aided traction in services segment (18.6% YoY). Growth in retail segment grew 16% YoY, driven by continued strong momentum in gold loans (+120% YoY). Within unsecured retail loans, credit cards continued to remain muted (~4% YoY), though personal loans had started to witness revival at ~13% YoY (in-line with recent commentary of large private banks). Credit to agriculture and allied activities also remained healthy at 13.7% YoY.
Though, deposit growth continues to lag credit expansion, keeping liabilities mobilisation competitive, recent RBI measures to incentivise FCNR(B) deposit mobilisation could provide boost incremental traction in deposit, thereby supporting CD ratio of lenders.

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