MUMBAI: Advance growth continued to outstrip deposit growth at several banks in the second quarter of FY27, with loan books expanding at a double-digit pace across public sector and mid-sized private lenders despite efforts to accelerate deposit mobilisation.Provisional business updates for Q2FY27 show advances growing between 13% and 29% year-on-year across the banks, with smaller and regional lenders generally recording faster expansion than their larger peers. Tamilnad Mercantile Bank led the pack with 29.4% growth in advances, followed by Karnataka Bank at 24.9%, UCO Bank at 24.8% and J&K Bank at 23.7%.Among larger public sector banks, Bank of India reported the fastest credit growth at 20.4%, followed by Canara Bank at 19.3%, Punjab & Sind Bank at 19.4%, Union Bank of India at 18.5% and Bank of Baroda at 18.3%. Punjab National Bank’s advances grew 14.8%, while Indian Bank reported 16.6% growth.Deposit growth, however, was more uneven. Bank of India’s deposits rose 21.6%, ahead of its 20.4% credit growth, while Bank of Baroda’s deposits grew 16.7%, broadly keeping pace with its 18.3% advance growth. Canara Bank’s deposits rose 13.1% against 19.3% credit growth, while Union Bank’s deposits grew 6.9% against 18.5% loan growth. At PNB, deposits grew 9.9%, compared with 14.8% growth in advances.The divergence was more pronounced among some mid-sized lenders. UCO Bank’s advances grew 24.8%, compared with 14.2% deposit growth, while J&K Bank reported 23.7% credit growth against 16.3% deposit growth. Karnataka Bank’s advances rose 24.9%, more than twice the 12% growth in deposits.Some lenders, however, managed to expand deposits faster than advances. Tamilnad Mercantile Bank’s deposits grew 25.5%, compared with 29.4% growth in advances, while Dhanlaxmi Bank reported deposit growth of 20.2% against 22.3% credit growth. At South Indian Bank, both advances and deposits grew 18.7%.The numbers point to continued pressure on banks to mobilise deposits even as credit demand remains firm.
