Private banks outpace PSBs in Q2 deposit mobilisation

Mumbai: Deposit mobilisation by private banks outpaced state-owned peers in the second quarter of FY27, indicating higher Foreign Currency Non-Resident Bank deposit mobilisation under the Reserve Bank's concessional swap window.

Data from provisional numbers disclosed by banks for the July-September period shows that private lenders' deposit growth ranged between 17 per cent and 34 per cent year-on-year compared to a 6.87-17.01 per cent rise of state-owned lenders.

In the private space, HDFC Bank reported an 18.8 per cent year-on-year deposit growth in Q2, Kotak Mahindra Bank (23.2 per cent), YES Bank (19.5 per cent), Axis Bank (20.7 per cent), IDFC First Bank (17 per cent), RBL Bank (34 per cent), and South India Bank (18.70 per cent), according to data.

In the PSB space, Bank of Baroda registered the highest growth of 17.01 per cent year-on-year in domestic deposits and 16.75 per cent in global deposits in Q2 FY27, followed by Central Bank of India (14.43 per cent), UCO Bank (14.05 per cent), and Punjab and Sind Bank (12.98 per cent).

Punjab National Bank reported 9.90 per cent year-on-year growth in global deposits and 9.44 per cent in domestic space. Canara Bank's global deposits grew 13.13 per cent, and domestic deposits rose 10.96 per cent.

Indian Bank and Union Bank of India's total deposits grew 12.4 per cent and 6.87 per cent, respectively.

"System deposit growth picked up from 11-12 per cent to 17 per cent year-on-year with strong FCNR(B) inflows of USD 133 billion, which accounted for 4.5 per cent of system deposits," Motilal Oswal Financial Services said in a report.

The Reserve Bank of India's special USD-INR forex swap facility for FCNR (B) deposits, Overseas Foreign Currency Borrowings (OFCB) and External Commercial Borrowings (ECBs) was launched on June 8, 2026. The scheme was open till August 31 for FCNR(B) deposits, and will be open until December 31, 2026, for ECBs and OFCBs. As of August 31, banks have mobilised USD 133 billion through the special Foreign Currency Non-Resident (FCNR-B) deposit scheme.

ABOUT THE AUTHOR

The Hans India