MUMBAI: Private banks’ Q2 FY27 credit and deposit growth got a significant lift from RBI’s concessional dollar-rupee swap facility for FCNR(B) deposits. Banks mobilised billions of dollars and deployed part of the funds through overseas branches, boosting headline balance-sheet growth.The gap between headline and underlying growth was significant. Axis Bank’s advances grew 22.7%, but 18.8% excluding Rs 43,800 crore of FCNR-linked overseas loans; deposit growth fell to 17% from 20.7%. Kotak’s advances grew 24.7% and deposits 23.2%, but underlying deposit growth was around 12.7% after excluding Rs 55,344 crore of FCNR(B) deposits, against which its overseas branches lent Rs 16,110 crore.IDFC First Bank’s gross advances grew 29.9%, against 20.4% domestically after excluding Rs 24,885 crore of IBU leverage. Deposit growth similarly fell to 17% from 25.9%. Yes Bank’s credit growth moderated to 17.7% from 23.8% and deposit growth to 13.2% from 19.5% after adjusting for FCNR-linked lending/mobilisation.HDFC Bank mobilised the most among the disclosed balances at $11.5 billion, with $5.7 billion of overseas loans and $3.1 billion of standby letters of credit against the deposits. Its advances grew 16.3% and deposits 18.8%. The June facility made FCNR mobilisation more attractive by allowing banks to swap the dollars with RBI at concessional rates. It boosted deposits directly and, through overseas lending, advances. The result was stronger headline growth, while normalised numbers show a more moderate but still healthy domestic trajectory.
