Five public sector banks have reported strong growth in lending during the second quarter of financial year 2026–27. Their gross advances, or total loans given by the banks, grew between 14.8 per cent and 24.68 per cent compared with the same period last year. The performance indicates that demand for loans remains healthy across important parts of the economy. Agriculture, industries, services and personal loans have all contributed to this increase.
The latest provisional business figures show that loan growth has remained higher than deposit growth. Deposits represent the money kept by customers in bank accounts, while advances indicate the funds lent by banks to individuals, businesses and other borrowers. Across the five banks, deposit growth ranged from 6.87 per cent to 14.05 per cent. This difference suggests that banks are expanding lending at a faster pace than the growth of their deposit base.
Punjab National Bank reported 14.8 per cent year-on-year growth in gross advances. Its total advances reached ₹13,42,693 crore by the end of September 2026. Total deposits grew 9.9 per cent to ₹17,77,097 crore. Domestic advances increased 12.59 per cent to ₹12,58,583 crore, while domestic deposits rose 9.44 per cent to ₹17,11,696 crore. The gap between domestic credit growth and advances growth stood at 315 basis points.
Union Bank of India recorded 18.53 per cent growth in gross advances, taking the total to ₹11,55,930 crore. Its deposits increased 6.87 per cent to ₹13,19,457 crore. Domestic advances grew 17.36 per cent to ₹11,05,807 crore, while domestic deposits rose 6.88 per cent to ₹13,18,977 crore. The bank’s CASA ratio, which shows the share of low-cost current and savings deposits, improved to 34.93 per cent from 32.56 per cent a year earlier.
Indian Bank reported 16.6 per cent growth in gross advances, which reached ₹7.23 lakh crore. Its total deposits increased 12.4 per cent to ₹8.73 lakh crore. The bank also recorded a small improvement in its CASA share, which rose to 39.28 per cent from 38.87 per cent.
UCO Bank delivered the strongest credit growth among the five banks. Its gross advances increased 24.68 per cent to ₹2.88 lakh crore, while deposits rose 14.05 per cent to ₹3.49 lakh crore. Punjab & Sind Bank reported 19.37 per cent growth in advances to ₹1,26,011 crore. Its deposits increased 12.98 per cent to ₹1,53,317 crore.
Healthy credit growth usually means shops are stocking up, factories are expanding, farmers are investing in their land and families are planning homes, vehicles or education. The figures are provisional and come from only five banks so far, so the final picture will be clearer as more banks report. For now, the numbers tell an optimistic story of a lending engine running strongly. They also show that deposit mobilisation is the next area to strengthen so that growth stays steady and sustainable.
Overall, the figures present an encouraging picture for public sector banking. Strong credit demand can support business expansion, household spending and investment. At the same time, the slower rise in deposits highlights the need for banks to attract more stable and low-cost funds while continuing responsible lending.
