Private banks lead Q4 deposit growth

Mumbai: Private sector banks reported stronger deposit growth in the January–March quarter, outperforming public sector banks (PSBs) even as the system continued to face challenges in mobilising deposits.

Data compiled from provisional disclosures showed private lenders posted deposit growth of 12–17% in Q4FY26, compared with 2–14% growth for PSU banks. The pressure on deposit mobilisation has persisted, especially in low-cost current account and savings account (CASA) deposits, as relatively lower interest rates have made them less attractive versus other investment options.

Banks have increasingly relied on certificates of deposit (CDs) to raise funds amid these constraints. Among private banks, IDFC First Bank reported the highest growth, with deposits rising 17.2% to Rs 2.43 lakh crore. Kotak Mahindra Bank followed with 14.7% growth, while HDFC Bank posted a 14.4% increase. According to Motilal Oswal, HDFC Bank’s deposit growth is expected to remain around 14% through FY28, with its credit-deposit ratio moderating to about 94%.

Among PSBs, Bank of India reported 14.33% deposit growth, followed by Bank of Maharashtra at 14% and Central Bank of India at 13.37%. Several lenders, including State Bank of India, are yet to release provisional data.