Banking liquidity and deposit growth in India remain strong at the start of July

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Banking liquidity in India July

Highlights

As of July 3, 2026, India's total foreign exchange reserves stood at ₹6,420,602 crore ($674,193 billion), with a weekly increase of $7.26 billion.
As of June 30, 2026, total deposits of scheduled commercial banks reached ₹26,538,493 crore, registering a year-on-year growth of 13.3 percent.
On July 5, 2026, the RBI absorbed a net liquidity of ₹189,279 crore from the system, reflecting its strategy to maintain balance in the financial system.

This article was translated from the original. Read the original version by our correspondent here.

Key Statistical Indicators from the RBI Bulletin

According to the Reserve Bank of India, as per the RBI's Weekly Statistical Supplement, India's total foreign exchange reserves stood at ₹6,420,602 crore, or $674,193 billion, as of July 3, 2026. On a weekly basis, this marks an increase of ₹126,095 crore, or $7.26 billion, though it is ₹133,259 crore, or $16,915 billion, lower compared to the end of March 2026.

Foreign currency assets are at ₹5,195,747 crore, gold at ₹1,001,911 crore, SDRs at ₹177,354 crore, and the reserve position in the IMF at ₹45,589 crore. RBI data also shows that loans and advances to state governments reached ₹40,761 crore on July 3, 2026, which is ₹31,971 crore higher than the previous week.

Total deposits of scheduled commercial banks stood at ₹26,538,493 crore as of June 30, 2026. This marks a fortnightly increase of ₹696,888 crore, with year-on-year growth at ₹3,112,848 crore, or 13.3 percent; during the same period, bank credit reached ₹21,928,365 crore, showing an annual growth of 18.6 percent.

Liquidity Operations and Impact on the Financial System

Money supply M3, as of June 30, 2026, stands at ₹31,887,695 crore. This is an increase of ₹666,958 crore, or 2.1 percent, over the fortnight, with year-on-year growth at 13.0 percent, indicating an expansion in money supply within the banking system.

The RBI's liquidity operations table also shows that net absorption remained in the system between June 29 and July 5, 2026. On July 5, 2026, net absorption stood at ₹189,279 crore, indicating that the central bank is using the Standing Deposit Facility and other operations to balance short-term liquidity.

The data also notes that the impact of the 2023 non-bank merger into a bank is included in banking data, and that after the 2025 Banking Law amendment, the definition of a fortnight is revised to be based on the 15th and the last calendar day of the month. Therefore, it is important to consider the time-series context when comparing recent banking trends.

Our previous report discussed the movement of Goldman Sachs (GS) shares and investor positioning ahead of the Q2 earnings report on July 14. It noted that M&A activity is supporting the company's fee-based revenue, while technical indicators suggest consolidation in the $1,024–$1,080 range and a higher likelihood of near-term downside risk if it slips below $1,032.

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