Private Banks Surge Ahead: Deposit Growth Outpaces Public Sector

Private sector banks showed stronger deposit growth in the January-March quarter compared to public sector banks, amid ongoing challenges in deposit mobilization. Private banks experienced growth between 12-17%, with IDFC First Bank leading. Public lenders reported slightly lower growth, with lending remaining robust across the sector.

In the latest quarter, private sector banks have outshone their public sector counterparts, reporting more robust deposit growth amid persistent struggles in the broader banking industry. Private banks experienced a notable rise in deposits, ranging from 12 to 17 percent, during the January-March period.

IDFC First Bank led the private sector surge with a 17.2 percent growth to Rs 2.84 lakh crore, followed by Kotak Mahindra and HDFC Bank. Analysts from Motilal Oswal forecast sustained growth for HDFC Bank at 14 percent through FY28. Conversely, public sector banks showed varied outcomes, with Bank of India leading at 14.33 percent growth.

Despite challenges in deposit mobilization, lending activity remains strong across the banking sector, with state-owned banks slightly outperforming private lenders in credit growth. The systemic credit growth stands steady at 13.8 percent, driven by a consumption-led recovery following GST reductions.

(With inputs from agencies.)