Indian Banks Roar: Deposits & Loans Surge to Record Highs

Banking Sector's Monumental Expansion

The Indian banking system has experienced a profound transformation over the past two decades, underscored by a dramatic surge in both deposits and loans. A comprehensive report from the State Bank of India (SBI) highlights this robust growth, illustrating the increasing depth and scale of financial intermediation across the nation.

Record Growth Figures

From FY05 to FY25, total bank deposits rocketed from ₹18.4 lakh crore to an impressive ₹241.5 lakh crore. Simultaneously, bank advances, representing credit disbursed, climbed from ₹11.5 lakh crore to ₹191.2 lakh crore. This trajectory clearly indicates sustained strong credit demand and supply over the period.

The report notes that this growth momentum has particularly accelerated since FY21. Indian banks have demonstrated a significant balance sheet revival post-pandemic, with total banking assets growing from 77% of GDP in FY21 to an estimated 94% of GDP by FY25. This expansion suggests a deepening financial penetration into the economy.

Public Sector Banks Reclaim Ground

Public Sector Banks (PSBs) are showing a notable comeback, gradually increasing their market share in advances. This trend, following a steady decline since FY08, points to improved balance sheets and a renewed willingness to lend among state-owned financial institutions.

Deposit Dynamics

Overall CASA (Current Account Savings Account) ratios have held steady at approximately 37%. However, the composition varies. Private banks have successfully boosted their CASA share, while foreign banks have observed a reduction in their CASA ratios. The total asset size of Indian banks has also seen substantial growth, expanding from ₹23.6 lakh crore in FY05 to ₹312.2 lakh crore by FY25, with asset growth rebounding strongly in recent years.