Page 6 - Banking Finance October 2025

BANK UPDATE

Experts suggest higher dormancy in becoming costlier, prompting a shift Technology (IDRBT), is part of a larger
economically weaker states with back to traditional bank credit. This push to enhance cybersecurity and pub-
greater PMJDY enrolment. While the could revive corporate lending for lic trust in digital banking platforms.
government has not specified causes, banks in the coming quarters. The '.bank.in' domain is reserved exclu-
the rising share of inactive accounts While corporate loans lagged, SBI re- sively for legitimate banks. It offers
raises concerns about the long-term ported that retail and MSME segments stronger safeguards against fraud,
sustainability and effectiveness of the
performed strongly, indicating bal- phishing attacks, and impersonation
financial inclusion drive. Analysts urge
anced growth. The trend suggests a attempts compared to general do-
stronger account engagement strate- near-term turnaround in corporate mains like '.com' or '.in'.
gies to prevent further slippage. credit demand as debt markets lose
their edge. By adopting this exclusive domain, In-
Corporate borrowing ex- dian Bank aims to reassure customers
Banks are likely to benefit as compa- that their online banking experience is
pected to shift back to nies seek stable financing amid evolv- secure and authentic. It also signals the
banks: SBI MD ing interest rate dynamics and eco- bank's commitment to adopting cut-
nomic uncertainty. ting-edge digital practices.
Corporate borrowing is expected to
return to banks as rising bond yields Indian Bank shifts to The migration marks a significant mile-
make the debt capital market less at- stone in the broader digital transfor-
tractive, said Rama Mohan Rao Amra, '.bank.in' domain to boost mation agenda of the Indian banking
SBI's MD for international banking and security sector, aligning with RBI's digital safety
global markets. roadmap.
Indian Bank has migrated its corporate
Speaking at the 18th Banking Collo- website to the more secure '.bank.in'
quium in Kolkata, Amra noted that domain, becoming one of the first Deposit growth outpaces
corporate loan growth was weak in Q1 banks to act on RBI's directive. The credit in FY26 as corporates
FY26 as firms chose the debt market new address is https:// shun banks
due to lower rates and easier access. indianbank.bank.in.
In FY26 so far, banks have seen deposit
However, as bond yields harden, bor- This move, guided by the Institute for inflows surpass credit disbursement by
rowing through debt instruments is Development and Research in Banking Rs. 1.56 lakh crore, a sharp rise from
Rs. 34,270 crore in the same period last
UPI crosses 2,000 crore transactions in August 2025 year. This trend is attributed to strong

Unified Payments Interface (UPI) hit a new milestone in August 2025 by pro- deposit growth and corporates opting
cessing 2,001 crore transactions worth Rs. 24.85 lakh crore - marking the for cheaper debt market instruments
first time monthly volumes crossed the 2,000-crore mark. like bonds and commercial papers.
This was a 34% year-on-year increase and 2.8% higher than July's transac- From April 4 to August 9, 2025, depos-
tion count, though total value dropped slightly from Rs. 25.08 lakh crore. its grew by Rs. 3.54 lakh crore, while
Compared to June, August saw an 8.7% rise in volumes and a 3.4% value advances increased only Rs. 1.97 lakh
increase. crore. The Monetary Policy Committee
noted that credit offtake has not kept
Daily average transactions reached 64.5 crore, up from July's 62.8 crore.
pace despite lower lending rates, es-
Despite a dip in average daily value to Rs. 80,177 crore, it remained 21%
higher than the previous year. pecially in urban areas where demand
remains subdued.
Since launching in 2016, UPI has scaled rapidly, reaching over 70 crore daily
payments by August 2025. Its consistent growth reflects deeper digital pay- Economist Saugata Bhattacharya ob-
ment adoption and NPCI's success in transforming India's retail payment served that rate cuts have helped
small businesses, but large corporate
ecosystem.
borrowing still lags. Overall, banks are
UPI's dominance now defines India's digital transaction landscape, both in flush with funds, but loan demand re-
volume and trust. mains uneven across segments.

6 | 2025 | OCTOBER | BANKING FINANCE