Metros fill bank vaults, but credit now fuels India’s heartland

The share of bank deposits held in metro cities has risen from 50.9% in March 2020 to 53.2% in March 2025, while their share of bank credit declined from 63.5% to 58.7%, as per Reserve Bank of India data. This trend reflects progress towards a more balanced distribution of banking resources nationwide. A key factor is banks' increased focus on personal loans, which accounted for 47.8% of total credit in March 2025, up from 41.5% in 2020. Within this, the share of female borrowers also rose from 22% to 23.8%. Metros, though still dominant, are no longer the sole magnet for national deposits.
Simultaneously, capital and population movements towards semi-urban and rural areas have helped lift deposit shares in these regions. By March 2025, total individual deposits stood at Rs. 2,34,50,000 crore (US$ 2.7 trillion), with metros holding Rs. 24,80,000 crore (US$ 289.72 billion) (53.3%), urban centres Rs. 49,00,000 crore (US$ 572 billion) (20.9%), semi-urban areas Rs. 36,20,000 crore (US$ 422.90 billion) (15.4%), and rural areas Rs. 24,40,000 crore (10.4%). Lending trends also mirror this dispersal. Personal loans, the fastest-growing category, grew at 13.2% in FY25, boosting their share in total bank credit from 24.1% to 31% over five years. Housing loans became more affordable, with those carrying 9%+ interest falling from 54.5% to 36.8%, while high-interest consumer durable loans (11%+) dropped from 50.3% to 47.4%.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.