Private sector banks demonstrated stronger deposit mobilisation capabilities in Q4FY26, with deposit growth ranging from 12-17% compared to 2-14% growth among PSU banks, according to data compiled by PTI from banks' provisional numbers disclosures. Among private lenders, IDFC First Bank reported the highest growth with deposits rising 17.2% to ₹2.43 lakh crore, followed by Kotak Mahindra Bank with 14.7% growth and HDFC Bank with 14.4% growth. In the public sector space, Bank of India led with 14.33% deposit growth, followed by Bank of Maharashtra at 14% and Central Bank of India at 13.37%. As reported by Rediff Money, banks have increasingly relied on mobilising funds through certificates of deposit (CDs) in recent quarters amid sustained pressure on low-cost deposits.
On the lending front, state-owned banks outperformed private peers with advances growth in the range of 12-22% compared to 12-20% growth recorded by private lenders. Bank of Maharashtra reported the strongest advances growth of 22% year-on-year to ₹2.92 lakh crore, while UCO Bank achieved 20% growth to ₹2.34 lakh crore and Central Bank of India reported 18.90% growth to ₹3.45 lakh crore. As reported by Motilal Oswal, systemic credit growth stood at 13.8% as of March 15, 2026, with momentum remaining robust supported by adequate liquidity buffers and consumption-led recovery following GST cuts.
The banking system continues to face persistent challenges in mobilising deposits, particularly on the current account and savings account (CASA) front, as relatively lower interest rates have made such deposits less attractive compared with other financial instruments. According to Motilal Oswal, banks have increasingly relied on mobilising funds through certificates of deposit (CDs) in recent quarters. The brokerage noted that HDFC Bank's deposit growth will continue to be at 14% till FY28, with the credit deposit ratio likely to moderate to 94% by end of FY28. As reported by Rediff Money, a majority of banks have shared provisional performance data after the end of the quarter, but some like the country's largest lender SBI have not yet disclosed their figures.
On the profitability front, Motilal Oswal projects that private sector lenders' pre-provisioning operating profit will grow by 9.1% year-on-year and 3.9% quarter-on-quarter, with PAT to grow by 11.9% YoY and 6.9% QoQ in Q4FY26. However, PSU banks' PAT is expected to grow by 2.1% YoY (down 5.3% QoQ) in Q4FY26E, amid repricing on yields, limited reduction in cost of funds, and modest treasury gains due to rising bond yields, as reported by the brokerage firm.
