Bank deposit growth slips to 7-qtr low of 9.9% in Q2, Pg13

Key Highlights:

• Scheduled Commercial Banks' deposit growth slowed to 9.9% in Q2 FY26, a seven-quarter low, compared to 11.7% a year prior.
• Metropolitan branches saw a decrease in deposit growth to 9.6% in September 2025 from 12.7% the previous year.
• Public Sector Banks (PSBs) increased their share of deposits to 57.6% in the September quarter.
• Private sector bank deposit growth fell to 10% in September, down from 15.1% a year earlier.

Detailed Insights:

• Rural branches recorded deposit growth of 11.7%, while semi-urban and urban branches grew at 10.7% and 9.5% respectively.
• Term deposit growth showed a declining trend at 11.6%, while current and savings deposits saw higher growth in Q2 FY26 at 9.3% and 6.7% respectively.
• The majority of term deposits, 69.8%, were held under the 'one to three years' maturity bucket.
• Term deposits with interest rates less than 7% increased to 46% in September.

Key Concepts Involved:

• Scheduled Commercial Banks: Banks regulated by the RBI and included in the Second Schedule of the RBI Act, 1934.
• Term Deposits: Deposits held for a fixed period with a specific maturity date and interest rate.
• Public Sector Banks (PSBs): Banks where the government holds a majority stake.