India’s banking sector has started 2026 on a strong note. The latest data released by the Reserve Bank of India (RBI) shows continued expansion in deposits, credit growth, and overall balance sheet strength.
According to the official Scheduled Banks’ Statement of Position in India as on January 31, 2026 , both deposits and bank credit have recorded significant year-on-year growth. The data reflects healthy liquidity conditions and steady economic momentum.
Let us break down the key numbers and understand what they mean for the Indian economy.
Total Deposits Cross ₹253 Lakh Crore
One of the most important indicators of banking health is deposit growth. As on January 31, 2026, total deposits (excluding inter-bank deposits) of All Scheduled Banks stood at:
₹25,398,629.58 crore
This is a notable rise compared to:
- ₹25,018,283.44 crore (January 15, 2026)
- ₹22,591,678.12 crore (January 24, 2025)
This shows strong year-on-year growth in savings and term deposits.
Demand vs Time Deposits
The deposit base consists of:
- Demand Deposits: ₹3,194,032.51 crore
- Time Deposits: ₹22,204,597.07 crore
Time deposits continue to dominate, accounting for the majority share. This trend suggests that customers are preferring fixed deposits and term-based savings instruments, likely due to attractive interest rates.
Moreover, rising time deposits improve banks’ funding stability because these funds remain locked in for a specific tenure.
Bank Credit Rises to ₹209.66 Lakh Crore
Another strong indicator is credit expansion. Bank Credit (excluding inter-bank advances) stood at:
₹20,966,065.04 crore
Compared to:
- ₹20,625,130.93 crore (January 15, 2026)
- ₹18,326,104.40 crore (January 24, 2025)
This shows healthy growth in lending activity across sectors.
Breakdown of Bank Credit
The majority of lending falls under:
- Loans, Cash Credits & Overdrafts: ₹20,554,098.08 crore
- Inland Bills Discounted: ₹2,76,780.26 crore
- Foreign Bills Discounted: ₹23,274.40 crore
Loans and overdrafts form the backbone of credit growth. Retail loans, MSME financing, and corporate credit demand are likely driving this expansion.
RBI Borrowings Rise Sharply
One interesting development is the rise in borrowings from the RBI.
Borrowings from RBI stood at:
₹136,073 crore as on January 31, 2026
This is significantly higher than:
- ₹32,336 crore (January 15, 2026)
These borrowings include liquidity facilities such as Repo, Term Repo, and Marginal Standing Facility (MSF), as clarified in the RBI note PR21089825195257624E32B1EB41D64….
This temporary increase suggests that banks may have tapped liquidity windows to manage short-term requirements.
Investments Remain Strong at ₹69.90 Lakh Crore
Total investments (at book value) stood at:
₹6,990,918.46 crore
The bulk of investments are in:
- Central Government Securities
- State Government Securities
- Treasury Bills
Banks traditionally invest a large portion of funds in government securities to comply with Statutory Liquidity Ratio (SLR) requirements.
A stable investment portfolio ensures balance sheet strength and lower risk exposure.
Cash and Balances with RBI
Liquidity indicators show:
- Cash in hand: ₹84,874.86 crore
- Balances with RBI: ₹771,704.13 crore
Balances with RBI declined compared to mid-January levels but remain comfortable.
These balances are part of the Cash Reserve Ratio (CRR) requirements and help maintain systemic liquidity stability.
Liabilities to the Banking System
Demand and time deposits from banks stood at:
₹344,450.58 crore
Meanwhile, borrowings from banks were:
₹81,307.96 crore
Inter-bank liabilities and borrowings reflect normal banking operations and liquidity adjustments.
Food Credit Outstanding
Food credit plays a crucial role in supporting procurement agencies such as:
- Food Corporation of India (FCI)
- State Government agencies
As per the RBI statement PR21089825195257624E32B1EB41D64…:
- Scheduled Commercial Banks: ₹89,295.40 crore
- Scheduled Co-operative Banks: ₹51,974.00 crore
This indicates ongoing support to public food procurement and distribution systems.
Number of Banks in the System
The report confirms the current banking landscape:
- 121 Scheduled Commercial Banks
- 24 Scheduled State Co-operative Banks
- 52 Scheduled Primary (Urban) Co-operative Banks
This broad network ensures credit flow across urban and rural India.
Year-on-Year Growth Analysis
Let’s compare January 2025 and January 2026:
| Indicator | Jan 2025 | Jan 2026 | Growth Trend |
|---|---|---|---|
| Deposits | ₹22.59 lakh crore | ₹25.39 lakh crore | Strong Increase |
| Bank Credit | ₹18.32 lakh crore | ₹20.96 lakh crore | Robust Growth |
| Investments | ₹67.88 lakh crore | ₹69.90 lakh crore | Stable Rise |
The data clearly shows:
- Deposits growing steadily
- Credit expanding at a healthy pace
- Investments remaining stable
This balance indicates a well-managed banking ecosystem.
What Is Driving Deposit Growth?
Several factors may be contributing:
- Higher interest rates on fixed deposits
- Improved household savings
- Corporate treasury allocations
- Digital banking penetration
As financial awareness increases, deposit mobilization strengthens.
What Is Fueling Credit Growth?
Credit growth may be driven by:
- Retail housing loans
- Vehicle loans
- MSME sector demand
- Infrastructure financing
- Corporate capex revival
Healthy credit growth reflects economic activity and investment demand.
Liquidity Conditions: Comfortable but Active
Although borrowings from RBI increased, this does not necessarily indicate stress. Instead, it may reflect:
- Seasonal liquidity adjustments
- Tax outflows
- Government bond settlements
Banks often use RBI facilities for short-term liquidity management.
Overall, systemic liquidity appears stable.
What This Means for the Indian Economy
The January 2026 data sends several positive signals:
1. Strong Savings Base
Rising deposits indicate growing financial security among households.
2. Expanding Credit
Credit expansion supports consumption, business growth, and job creation.
3. Stable Investment Portfolio
Government securities provide balance sheet safety.
4. Active Liquidity Management
RBI’s framework ensures smooth monetary transmission.
Together, these factors point toward a resilient banking system entering 2026.
Expert Interpretation
The banking system’s balance sheet expansion suggests that:
- Economic activity remains steady.
- Lending appetite continues.
- Deposit mobilization remains robust.
Moreover, the gap between deposit growth and credit growth appears manageable, which is crucial for maintaining liquidity comfort.
The latest data from the Reserve Bank of India shows that India’s banking sector remains strong and well-capitalized as of January 31, 2026.
Deposits have crossed ₹253 lakh crore, credit is nearing ₹210 lakh crore, and investments remain stable above ₹69 lakh crore. While borrowings from RBI have increased in the latest fortnight, overall liquidity conditions remain comfortable.
In short, the numbers reflect stability, growth, and resilience in the Indian banking system.
Rajil M P is a seasoned banking professional with over eight years of experience in the Indian banking sector. He has successfully completed the JAIIB and CAIIB examinations conducted by the Indian Institute of Banking & Finance (IIBF), reflecting his strong academic foundation and practical expertise in banking, finance, and risk management. He is the founder and editor of IndianBanker.com, a trusted platform focused on banking news, exam preparation, financial updates, and practical tools for banking aspirants, professionals, and informed readers. Drawing from real-world banking experience, Rajil simplifies complex topics such as interest rates, loans, deposits, RBI policies, and government schemes, making them easy to understand and apply.
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