Run up to FY26-end: Credit and deposit growth see robust pick up

Economic Overview - A robust increase in credit and deposits in the last fortnight of January indicates that the Indian economy is gaining momentum despite challenges from higher US tariffs, global trade fragmentation, and geopolitical tensions [1] - Total credit and deposits of all scheduled banks rose by ₹3,40,934 crore and ₹3,80,346 crore, respectively, in the fortnight ending January 31, 2026, reversing the previous fortnight's decline [1] Credit and Deposit Trends - In the preceding fortnight (January 15, 2026), credit and deposits declined by ₹3,55,765 crore and ₹1,88,383 crore, respectively [2] - The increase in credit is supported by a strong pipeline of corporate loan sanctions from public sector banks, with State Bank of India reporting ₹7.86 lakh crore, Punjab National Bank at ₹1.02 lakh crore, and Bank of Baroda at ₹75,000 crore [2] Sector-Specific Insights - The State Bank of India is experiencing a rise in corporate loans, particularly in the power (including renewables), metals, and infrastructure sectors [3] - The RBI's decision to allow commercial banks to finance Real Estate Investment Trusts (REITs) and acquisitions by Indian companies is expected to enhance SBI's corporate loan book and margins [4] Deposit Inflows - Experts suggest that the downturn in equity markets may have led to increased deposit inflows, particularly in bulk deposits [5] - Punjab National Bank's CEO noted that the bank has over 18 crore customers who maintain confidence in the banking system [5] Economic Indicators - Year-on-year credit growth stands at 14.40% as of January-end, surpassing deposit growth of 12.42% [7] - The recent credit increase is attributed to large corporates drawing down on sanctions, indicating buoyancy in the economy reflected by higher credit demand [7][8]