Scheduled Commercial Banks Record 16.5% Credit Growth in June 2026

Scheduled commercial banks (SCBs) recorded robust growth in both credit and deposits at the end of June 2026, according to the Reserve Bank of India’s Quarterly Basic Statistical Returns (BSR). Bank credit expanded by 16.5 per cent year-on-year, marking a sharp increase from 9.9 per cent registered a year earlier. Deposit growth held steady at 11.5 per cent during the same period.

The data shows that credit expansion was broad-based across various sectors and borrower categories. Lending to private corporates accelerated significantly to 21.1 per cent. Credit extended to households and the public sector grew by 15.2 per cent and 14.6 per cent, respectively. Among specific segments, loans to trade grew by 18.1 per cent, while finance sector lending increased by 22.4 per cent, outpacing overall credit growth. Additionally, lending to female individual borrowers rose by 19.7 per cent.

The weighted average lending rate eased to 9.26 per cent from 9.71 per cent a year earlier. The data indicates that nearly two-thirds of total loans carried interest rates below 9 per cent.

On the liabilities side, deposit mobilisation remained strong with an 11.5 per cent growth rate. Rural and semi-urban bank branches registered faster deposit growth compared to the overall banking system. The household sector remained the dominant contributor, accounting for 58.8 per cent of total deposits and nearly 99 per cent of incremental deposits during the quarter.

Term deposits continued to drive liability growth, increasing by 12.9 per cent year-on-year. This outpaced the growth in savings deposits at 10.6 per cent and current deposits at 5.3 per cent. The impact of lower interest rates was also visible in deposit pricing: more than two-thirds (66.7 per cent) of term deposits carried interest rates below 7 per cent in June 2026, compared with 35 per cent in the previous year.

Depositors showed a clear preference for medium-term savings instruments, with maturities ranging from one to three years constituting about 70 per cent of total term deposits. Furthermore, large term deposits of ₹1 crore and above accounted for 47.3 per cent of total term deposits at the end of June 2026, with 35.7 per cent originating from deposits valued at ₹5 crore and above.

"The acceleration in credit growth to 16.5 per cent alongside steady deposit mobilisation points to healthy economic activity across sectors. For businesses and entrepreneurs, the broadening of credit—particularly the strong momentum in private corporate lending and trade finance—indicates improved liquidity access and easing borrowing costs. As banks adjust to lower interest rate structures and preference shifts toward medium-term instruments, managing working capital and capital allocation effectively will be key for growing enterprises navigating the current financial landscape." — Dr. Shishir Gupta, Founder & CEO, StartupLanes