Bengaluru, January 6, 2026, 11:32 IST
- IndusInd Bank said net advances fell 13.1% from a year earlier and declined for a fourth straight quarter.
- Deposits rose 1.1% from September but were down 3.8% year-on-year; the CASA ratio slipped to 30.3%.
- The contraction contrasts with double-digit loan growth reported by larger private lenders in the December quarter.
IndusInd Bank said its loan book shrank again in the December quarter, extending a run of sequential declines to four straight quarters and keeping the private lender out of sync with a broader pickup in credit demand.
The update matters now because Indian banks are heading into quarterly earnings with investors fixated on a familiar pressure point: growing loans while securing enough deposits to fund them at a reasonable cost.
That backdrop has turned tougher as credit demand rebounds. Bank credit grew 11.5% year-on-year in November, the latest monthly data available, while the banking system’s loan-to-deposit ratio has climbed to an all-time high of 81.6%, Macquarie Research said — a sign loans are rising faster than deposits.
In its stock exchange filing, IndusInd said net advances stood at 3.18 trillion rupees as of Dec. 31, down 13% from a year earlier and 2.2% from the September quarter.
Total deposits were 3.94 trillion rupees, down 3.8% year-on-year but up 1.1% sequentially, while retail and small-business deposits were about 1.85 trillion rupees, Rediff reported, citing a regulatory filing.
The bank’s CASA ratio — the share of deposits held in current and savings accounts, which are typically cheaper funding than term deposits — fell to 30.3% from 30.7% in the prior quarter and 34.9% a year earlier, it said.
“The glide path to lower CD ratios will take longer, even though liquidity conditions have improved,” said Nitin Aggarwal, head of banking and financial research at Motilal Oswal Financial Services, referring to the credit-deposit ratio as lenders compete for deposits. https://m.economictimes.com/markets/expert…
IndusInd has been trying to steady operations after disclosing a $230 million hit tied to misaccounting in internal derivative trades for the year ended March 2025, a lapse that prompted the resignations of its chief executive and deputy chief. Veteran banker Rajiv Anand took over as CEO in August after regulatory approval.
The contrast with peers has become sharper. HDFC Bank and Kotak Mahindra Bank have reported double-digit year-on-year loan growth for the December quarter, signalling a rebound in demand that IndusInd has yet to capture.
But the numbers also underline the downside scenario: if the shift away from low-cost deposits continues, funding costs can rise just as the loan book is contracting, squeezing profitability even before any change in asset quality shows up in earnings.
