India’s bank deposits jump Rs 7 lakh crore, signalling robust capital inflows and upbeat Q1FY27 outlook

NEW DELHI: Overall deposits in India's banking system jumped by around Rs 7 lakh crore for the fortnight ended June 30, 2026, marking the third highest fortnightly growth in 29 years, a new report has said.

The report from State Bank of India (SBI) Research said the surge reflected buoyant capital flows aided by recent Reserve Bank of India and government measures.

Further, commercial paper and bank credit have expanded indicating that economic activity has surprised on the upside in Q1FY27.

Netting out quarter end mobilisation, the bank estimated that jump in capital flows could be about $15 billion, driven in part by renewed Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs) inflows.

India has also received $7 billion in FII inflows since the measures announced by the government to bring the foreign inflows and boost the rupee.

"Separately, RBI foreign currency reserves increased by $4.4 billion during the fortnight, indicating the desire of RBI to also recoup foreign exchange reserves," the report said.

Long tenor G-sec yields rallied faster than corporate bond yields in May and June, supported by foreign inflows and stronger sovereign bond demand, with corporate yields being sticky amid continued liquidity demand, credit and duration premium demand by investors. (IANS)

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