Aggregate deposits with Indian banks rose to Rs 265.4 lakh crore as on June 30, 2026, recording a sharp fortnightly increase of about Rs 7 lakh crore, or 2.7%, according to Business Today. The surge was driven by a balanced rise across both demand and time deposits, pushing the year-on-year deposit growth for Q1FY27 to 13.3%—significantly higher than the 10.1% growth recorded a year ago.
Despite the last fortnight surge, deposit growth continued to lag credit growth. Bank credit stood at Rs 219.3 lakh crore as on June 30, 2026, after increasing by Rs 3.8 lakh crore during the fortnight, marking a growth of 1.8%. On a year-on-year basis, credit growth accelerated sharply to 18.6%, nearly double the 9.5% growth recorded in June 2025.
Deposit Growth Dynamics
Until the fortnight ended June 15, 2026, bank deposits were down Rs 3.9 lakh crore or -1.5% from end-March 2026 levels. The growth in the first three months at 1.2% or Rs 3.1 lakh crore was less than the fortnightly growth because earlier fortnights had seen bank deposits shrink from end-March levels, according to the report.
"Netting out the quarter end deposit mobilisation, we believe that the surge is also on account of a potential jump in capital flows because of FCNR(B), ECB and OFCB," said Soumya Kanti Ghosh, chief economist, SBI in a report. India has also received $7 billion in FII inflows since the measures announced by the government to bring foreign inflows and boost the rupee. Cumulative debt under the fully accessible route (FAR) has seen inflows amounting to $2.7 billion since then, Ghosh added.
According to the SBI report, an informed guess of the magnitude of overall capital flows stripping out trend growth indicates that this number could be $15 billion. FCNR(B) flows have picked up pace.
Credit Expansion and Investment Trends
With credit growth continuing to outstrip growth in deposits, banks have been going slow on their investments, which are largely in government securities (g-secs). At the end of the first quarter, banks' investments stood at Rs 70.9 lakh crore. On a year-on-year basis, investment growth moderated to 5.8%, compared with an 8.7% increase in the preceding year.
| Metric | Fortnight to June 30, 2026 | Year-on-Year Growth |
|---|---|---|
| Aggregate Deposits | Rs 265.4 lakh crore | 13.3% (vs 10.1% a year ago) |
| Fortnightly Deposit Change | +Rs 7 lakh crore (+2.7%) | — |
| Bank Credit | Rs 219.3 lakh crore | 18.6% (vs 9.5% a year ago) |
| Fortnightly Credit Change | +Rs 3.8 lakh crore (+1.8%) | — |
| Bank Investments (g-secs) | Rs 70.9 lakh crore | 5.8% (vs 8.7% a year ago) |
Implications for Trade Finance and Cost of Capital
For finance executives and treasury professionals, the persistent gap between credit and deposit growth signals continued pressure on banks' funding costs. With deposit growth lagging, banks may need to raise term deposit rates to attract more funds, which would increase the cost of capital for trade finance and working capital loans. The surge in capital flows—including $7 billion in FII inflows and potential $15 billion in overall flows—could provide some relief by boosting liquidity, but the impact on trade finance costs will depend on whether these flows are sustained. Additionally, the moderation in bank investment in g-secs (5.8% YoY) suggests banks are prioritising lending, which could support credit availability for businesses, including importers and exporters. However, the rupee's stability, supported by FII inflows and FAR debt inflows, may reduce hedging costs for foreign currency exposures, a positive for companies engaged in international trade.
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