Kerala’s Banking Sector Posts Strong Growth as Deposits, Credit Reach Record Highs

Kerala’s banking sector registered robust growth across key financial indicators during the 2025-26 financial year, reflecting strong credit expansion, rising savings, and sustained economic activity in the state, according to the State-Level Bankers’ Committee (SLBC).

At the State-Level Review Meeting held in Thiruvananthapuram, Chief Minister V. D. Satheesan highlighted the banking sector’s vital role in Kerala’s development and called for closer cooperation between banks and the government to support future growth initiatives.

The SLBC reported that total deposits in Kerala increased by 12 per cent year-on-year to ₹10.63 lakh crore , while total advances rose by 13 per cent to ₹7.75 lakh crore as of March 2026. The state’s Credit-Deposit (CD) Ratio improved to 72.88 per cent , significantly above the Reserve Bank of India’s benchmark of 60 per cent, indicating healthy lending activity and strong economic momentum.

Agricultural credit grew by 12 per cent to a record ₹1.74 lakh crore , while lending to the Micro, Small and Medium Enterprises (MSME) sector increased 11 per cent to an all-time high of ₹1.06 lakh crore . Deposits from Non-Resident Keralites (NRKs) also rose by 11 per cent to ₹3.25 lakh crore , underlining the continued importance of remittances to the state economy.

The Chief Minister said banks would play a crucial role in financing Kerala’s infrastructure ambitions, including the integration of ports, inland waterways, and logistics networks . He also urged greater support for renewable energy projects , senior citizen-focused financial products, and entrepreneurial ventures for returning expatriates.

The strong banking performance highlights Kerala’s expanding credit base, growing household savings, and increasing investment activity . Rising deposits and advances across sectors suggest improving business confidence and stronger financial intermediation, reinforcing the banking sector’s role as a key driver of the state’s economic growth.