Bank lending accelerated in the April-June quarter of FY27, but deposit mobilisation continued to trail credit growth, widening the funding gap across the banking system and highlighting mounting pressure on banks' liability franchises, according to business updates reported by The Times of India.
While several lenders posted strong double-digit growth in advances during the quarter ended June 2026, deposit growth remained subdued, with some banks even reporting sequential declines in deposits. Analysts warned that the widening gap between loans and deposits has pushed the banking system's loan-to-deposit ratio to one of its highest levels in more than a decade, raising concerns over funding sustainability.
