South Indian Banks Report Surge in Q4 Credit Growth Outpacing Deposits

CHENNAI – Five prominent South-based lenders, including the public sector Indian Bank, have reported robust financial updates for the quarter ending March 2026. A consistent trend across these institutions shows gross advances growing at a faster clip than deposit mobilization, signaling strong credit demand in the region.

Performance Highlights:

• Indian Bank: Reported a 13.6% rise in gross advances to Rs 6.68 lakh crore, driven primarily by a 15.7% surge in the RAM sector (Retail, Agriculture, and MSME). Deposits grew by 12.6%.
• Tamilnad Mercantile Bank: Led the private pack with a massive 20.32% growth in advances, while deposits increased by 14.94%.
• Karur Vysya Bank: Saw advances climb 16.87% to Rs 97,052 crore, outperforming a 13.31% rise in deposits.
• South Indian Bank: Reached a milestone with advances crossing Rs 1 lakh crore (15.66% growth), supported by a healthy 14.71% uptick in deposits.
• Karnataka Bank: Posted steady growth with advances up 6.9% and deposits rising 3.8%.

Strategic Outlook

The results highlight a strengthening CASA (Current and Savings Account) ratio for several lenders, providing a lower-cost liability base to fund aggressive lending. The focus on the RAM sector and small-ticket loans remains the primary engine for balance sheet expansion as the 2026-27 fiscal year begins.