Bank loans against fixed deposits surge 53% to Rs 2.17 lakh crore on FCNR-B

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The Economic Times daily newspaper is available online now. Read Today's Paper Bank loans against fixed deposits surge 53% to Rs 2.17 lakh crore on FCNR-B leverage playBy Atmadip Ray, ET BureauLast Updated: Oct 30, 2026, 08:47:00 PM ISTSynopsis

By the close of September, loans against fixed deposits experienced a striking 53% year-on-year spike, reaching Rs 2.17 lakh crore. The demand for gold loans soared to an astonishing 82.6% increase, showcasing robust customer interest throughout India. Personal loans appreciated by 17.3%, hitting Rs 74.3 lakh crore, complemented by growth in agricultural and industrial credits. Overall, the banking sector reported a 19.4% expansion in total credit, amounting to Rs 229.

Kolkata: Bank loans against fixed deposits surged 53% year-on-year to Rs 2.17 lakh crore at the end of September, making it one of the top contributors to overall credit expansion, while gold loans continued to be the fastest growth engine for several lenders, data published Friday by the central bank showed.

The rise in loans against fixed deposits reflects the leverage banks used to mobilise foreign-currency commitments under the Reserve Bank of India's (RBI) dedicated dollar-mobilisation schemes.

Leverage was a strategy wherein the regulator allowed overseas customers to pledge their foreign currency non resident bank (FCNR-B) deposits as collateral to borrow a multiple of that amount in foreign currency, and re-invests the borrowed funds into another FCNR-B deposit.

Bank loans against fixed deposits had grown 14.3% pace in the same period last year.

Gold loans by banks expanded by 82.6% year-on-year to Rs 5.77 lakh crore. Most banks do not classify agriculture loans taken by pledging gold ornaments as gold loans, otherwise the outstanding print would have been higher.

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Bank loans to non-bank financial companies jumped 41.8% year.on.year to Rs 22.2 lakh crore. Out of this, loans given to state-owned financial institutions rose the fastest -- at 79.7% -- to Rs 3.69 lakh crore, RBI data showed.

On a year-on-year basis, overall bank credit expanded by 19.4% to Rs 229.9 lakh crore at the end of September 30, compared with a 11.2% print seen a year prior.

Personal loans grew at a 17.3% rate to Rs 74.3 lakh crore while both credit to agriculture & allied sector and credit to industry rose at 19.5% each. The outstanding agricultural credit stood at Rs 28.2 lakh crore while industrial bank loans at Rs 49.8 lakh crore.

Bank loans to the services sector registered the highest growth rate at 28.3% to Rs 64.9 lakh crore.
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