Banks dip into surplus funds, short-term borrowings to support credit growth

This report covers key India-focused updates related to loans, EMI, interest rates and banking. Banks dip into surplus funds, short-term borrowings to support credit growth This is a Mint Premium article gifted to you.Subscribe to enjoy similar stories. Mumbai - Public sector banks (PSBs) are increasingly using surplus liquidity already available with them and also borrowing short-term funds from the Reserve Bank of India (RBI) to support loan growth, as deposits continue to lag behind credit demand. System-level bank credit grew 16.1% to ₹214 trillion in the financial year to 31 March (FY26) whereas deposits rose 13.5% to ₹262 trillion.