Bank deposit growth hit a decade-high 17.8% in August, boosted by massive FCNR-B inflows, even as credit growth eased to 19.1% and banks struggled to attract domestic savings. (Representative image)
By Atmadip Ray, ET Bureau
Last Updated: Sep 12, 2026, 06:42:00 AM IST
Kolkata: Bank deposits grew 17.8% year-on-year at the end of August, marking a new high in a decade, as inflows into foreign currency non-resident (bank), or FCNR(B), deposits offset challenges in local deposit mobilisation.
Credit growth stood at 19.1% year-on-year, compared with 19.4% at the end of July, according to Reserve Bank of India data.
Deposit growth surpassed the previous decadal high of 15.4% recorded a month earlier, as overseas Indians parked $126 billion in foreign currency-linked non-resident deposits in about two-and-a-half months since the RBI created a special window to attract dollar inflows.
About 48.5% of the FCNR(B) inflows are parked for five years, RBI governor Sanjay Malhotra said on Friday. Another 42% are parked for three years, with the balance for four years.
In the fortnight ended August 31, a net Rs 9.4 lakh crore was added to bank deposits, taking the outstanding amount to Rs 278.7 lakh crore.
Banks were otherwise facing challenges in mobilising local deposits, with Indian savers shifting their preferences towards market-linked instruments to maximise returns.
Outstanding credit stood at Rs 223.9 lakh crore at the end of the reporting month. The credit-deposit ratio stood at 80.32%.
"Credit growth has been secural across sectors," Malhotra said in an interview with CNBC-TV18.
