India Bank Credit Growth Hits Eight-Quarter High as Deposit Gap Widens

India's bank credit growth reached an eight-quarter high of 16.5 per cent in Q1 FY27, while deposit growth trailed at 11.3 per cent, widening the credit-deposit gap to 512 basis points and pushing the system's loan-to-deposit ratio to a record 83.3 per cent, according to CareEdge Ratings. The expansion was driven largely by NBFC lending and trade credit. The RBI's FCNR(B) swap facility provided temporary relief, but analysts note that sustained deposit mobilisation remains a key challenge for the sector.