“For FY27, we are looking at deposit growth of 10-12% and credit growth of 12-14%, based on an assumption of real GDP growth of 7%,” said Madan Sabnavis, chief economist at Bank of Baroda. “While higher bulk deposit growth was witnessed (in FY26), there was also a reverse migration of household savings from capital markets in the face of uncertainty.”
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According to RBI data, Bank deposits totalled ₹262.30 lakh crore as of March 31, reflecting an increase of ₹31.14 lakh crore during the year-an all-time high and well above the addition of ₹21.14 lakh crore in FY25. In the final fortnight of the fiscal year, deposits rose by ₹12.19 lakh crore.
Analysts peg deposit growth at 10-12%
Bank credit stood at ₹213.61 lakh crore as of March 31, with an annual increase of ₹29.59 lakh crore against ₹18.17 lakh crore the previous year. The last fortnight of the year contributed ₹5.92 lakh crore to that expansion.
The incremental credit-deposit ratio was 95%. The overall CD ratio hit an all-time high of 85%, up from 79.61% last year.”In FY27, aggregate deposits are estimated to grow by 11-12%, while credit growth is expected at 13-14%,” said Soumya Kanti Ghosh, group chief economic adviser at State Bank of India.
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“In the current year, revised LCR (liquidity coverage ratio) norms are likely to free up ₹2.7-3.0 lakh crore of lendable resources, which will help bridge the gap between deposit and credit growth. That said, declining CASA (current and savings account) ratios remain a major concern-they signal a shift from low-cost, stable deposits to more expensive funding sources, compressing net interest margins.”
The structural challenge, however, runs deeper than the current rate cycle.
Deposit growth has been losing ground to credit expansion for more than a decade. Between FY24 and December 2025, deposits grew 9% against credit growth of 11.3%. In the preceding two years-FY22 to FY24-the gap was even wider, with deposits growing 11.9% while credit expanded 17.6%. The dynamics reversed between FY18 and FY22, when deposits grew 10.5% against credit 8.7%, and between FY10 and FY14, when deposits grew 15% against 17% by credit.