Are Indian Households Becoming Investors as Bank Deposits Surge?
Synopsis
A recent SBI report indicates a remarkable shift in Indian banking, with deposits and advances tripling from FY15 to FY25. This trend highlights a shift from saving to investing among households across various states, suggesting a robust financial future. Find out how this transformation is reshaping the banking landscape in India.
Key Takeaways
Deposits in Indian banks nearly tripled from Rs 85.3 lakh crore to Rs 241.5 lakh crore from FY15 to FY25.
Advances grew from Rs 67.4 lakh crore to Rs 191.2 lakh crore during the same period.
Public sector banks are regaining market share in lending.
The credit-deposit ratio increased significantly.
Profitability for banks is expected to improve due to favorable economic conditions.
New Delhi, Jan 12 (NationPress) A report has revealed that deposits and advances in Indian banks have nearly tripled from FY15 to FY25, indicating a significant strengthening of the banking sector and a revival in credit intermediation.
The SBI Research report highlighted that deposits surged from Rs 85.3 lakh crore to Rs 241.5 lakh crore, while advances increased from Rs 67.4 lakh crore to Rs 191.2 lakh crore during the period of FY15–FY25.
Bank asset growth has rebounded, climbing from 77 percent of GDP to 94 percent by FY25, showcasing a resurgence in financial depth, according to the report.
“Households across India are shifting from being mere savers to active investors. A comparison of incremental deposits between FY20-25 with the rise of investors in the same timeframe shows that states like Gujarat, West Bengal, Madhya Pradesh, Andhra Pradesh, and Karnataka are experiencing a rapid transition of deposits from banks to financial markets,” the report observed.
Moreover, over the longer span from FY15 to FY25, deposits grew from Rs 18.4 lakh crore to Rs 241.5 lakh crore while advances expanded from Rs 11.5 lakh crore to Rs 191.2 lakh crore, indicating substantial growth in the banking system, the report stated.
The pace of growth is notably quicker for advances, as the credit-deposit (C-D) ratio rose from 69 percent in FY21 to 79 percent in FY25, according to the research division.
Public sector banks are gradually regaining market share in terms of advances after a long-term decline since FY08, indicating a recovery in balance sheets and a renewed willingness to lend, the report noted.
For H1FY26, scheduled commercial banks reported a decrease in incremental deposit growth to Rs 8.1 lakh crore from Rs 8.6 lakh crore in H1FY25, while credit increased to Rs 7.6 lakh crore from Rs 7.4 lakh crore.
A recent analysis attributed the rise in profits for public sector banks to increased fee income and treasury gains, complemented by credit growth in the retail and MSME sectors, alongside normalized operating expenses.
It is anticipated that profitability will improve in H2FY26, driven by festive-season demand, credit growth, reduced CRR requirements, and a gradual normalization of slippages in the unsecured and MFI segments.
Point of View
I perceive this report as a significant indicator of the evolving financial dynamics in India. The rise in deposits and the shift towards investments reflect a growing confidence in the banking sector and a shift in household financial behavior. It's crucial for stakeholders to adapt to these changes for sustained economic growth.
NationPress
21 Jun 2026
Frequently Asked Questions
What does the SBI report say about bank deposits?
The SBI report indicates that deposits in Indian banks have nearly tripled from FY15 to FY25, showcasing significant growth in the banking system.
Which states are seeing a shift from bank deposits to financial markets?
States like Gujarat, West Bengal, Madhya Pradesh, Andhra Pradesh, and Karnataka are experiencing a faster transition of deposits to financial markets.
What is the projected profitability for public sector banks?
Profitability for public sector banks is expected to improve in H2FY26, driven by festive demand, credit growth, and favorable economic conditions.
How has the credit-deposit ratio changed?
The credit-deposit (C-D) ratio increased from 69 percent in FY21 to 79 percent in FY25, indicating a faster growth in advances.
What factors contributed to the rise in PSB profits?
The increase in PSB profits is attributed to higher fee income, treasury gains, and credit growth in retail and MSME segments.
