IndusInd Bank Faces Lending Slowdown—Deposits and Advances Slip in Q1 FY26

IndusInd Bank Ltd reported a muted start to FY26, with both deposits and net advances declining year-on-year as of June 30, 2025. According to provisional data, total deposits fell 0.3% YoY to ₹3.97 trillion, while net advances dropped 3.9% YoY to ₹3.34 trillion, signaling continued headwinds following the bank’s internal governance and derivatives accounting issues earlier this year.

 

The contraction in advances reflects a cautious lending stance, particularly in the microfinance and unsecured retail segments, which have been under stress. The bank has also been navigating a leadership transition, with the resignation of its CEO and Deputy CEO in Q2 FY25 amid a derivatives-related probe.

 

Analysts suggest that the bank’s focus on balance sheet fortification and tightened risk controls may have contributed to the subdued growth. However, the decline in deposits—amid rising competition for liabilities—raises concerns about funding momentum in the near term.

 

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Source: Economic Times – IndusInd Bank Faces Lending Contraction in Q1 FY26