Deposit growth gets a leg-up for banks in Q2 due to FCNR(B) mobilisation | Banking
Both public and private sector banks reported strong deposit growth in the July-September quarter of FY27 (Q2FY27), buoyed by FCNR(B) deposits mobilised under the RBI’s concessional swap window, which closed on August 31, while advances also recorded healthy growth, according to provisional data released by banks. Indian banks mobilised nearly $133 billion through FCNR(B) deposits under the RBI’s concessional swap window.
Bank of Baroda (BoB), India’s second-largest state-owned bank, reported 17 per cent year-on-year (YoY) growth in domestic deposits to ₹14.88 trillion, while advances grew 13.5 per cent to ₹11.87 trillion. Retail advances grew nearly 19 per cent YoY to ₹3.24 trillion. BoB mobilised around $8 billion under the RBI’s concessional swap window.
Meanwhile, Bank of India (BoI) reported 21.6 per cent YoY growth in deposits and a 20.4 per cent rise in advances in Q2FY27. On a sequential basis, deposits grew 8.3 per cent and advances increased 7.05 per cent. The bank’s credit-deposit (CD) ratio stood at 82.3 per cent, compared with 83.1 per cent a year ago and 83.3 per cent in the previous quarter. The domestic CD ratio stood at 78.1 per cent, against 81.8 per cent a year ago and 81.7 per cent in the preceding quarter. BoI mobilised nearly $2.4 billion through FCNR(B) deposits. Punjab National Bank (PNB) reported 9.9 per cent YoY growth in deposits in Q2FY27, its strongest in four quarters, while advances grew 14.8 per cent, the highest in six quarters. On a sequential basis, deposits increased 3 per cent and advances grew 5.5 per cent.
Separately, Yes Bank reported 23.8 per cent YoY growth in loans and advances to ₹3.10 trillion in Q2FY27, while deposits grew 19.5 per cent to ₹3.54 trillion. On a sequential basis, advances increased 8.6 per cent and deposits rose 12.3 per cent. After adjusting for FCNR(B) deposits mobilised under the RBI’s concessional swap facility, deposit growth stood at 6.5 per cent YoY, while advances growth, normalised for foreign currency term loans (FCTL) extended from its GIFT City branch, was 3.3 per cent. The bank’s current account and savings account (CASA) ratio stood at 30 per cent, compared with 33.7 per cent a year ago and 32.7 per cent in the previous quarter, while its credit-deposit (CD) ratio stood at 87.5 per cent, against 84.5 per cent a year ago and 90.4 per cent in the preceding quarter.
On the other hand, AU Small Finance Bank (AU SFB), which is in the process of becoming a universal bank, reported 28.6 per cent YoY growth in deposits to ₹1.70 trillion in Q2FY27, while gross advances grew 27.9 per cent to ₹1.50 trillion. On a sequential basis, deposits increased 8.1 per cent and advances rose 7 per cent. Its current account and savings account (CASA) deposits rose 29.1 per cent YoY to ₹50,290 crore, taking the CASA ratio to 29.5 per cent, compared with 29.4 per cent a year ago and 28.8 per cent in the previous quarter.
According to RBI data, as of September 15, credit growth in the system stood at 18.1 per cent YoY, while deposit growth stood at 17.3 per cent. In the financial year so far, while credit has grown by 4.5 per cent, deposits during the same period have grown by 5.3 per cent.
