BankBazaar CEO: Banking growth set to top 15% as AI revives deposits

BankBazaar’s CEO says credit growth may exceed 15% this year, helped by AI-led risk monitoring and product innovation as deposit momentum returns after market volatility.

NEW DELHI — Bank credit growth is picking up again, and the numbers could look stronger than they have in years, according to Adhil Shetty, co-founder and CEO of BankBazaar.

Shetty said he expects credit growth to cross 15% this year, pointing to December’s 15–16% growth rate—around 5 percentage points higher than the previous year.. “With AI coming in with better data, usage of systems, that we will see something north of 15%,” he said on the sidelines of the 6th PICUP Fintech Conference and Awards organised by FICCI, speaking in a cautious but upbeat tone about the next phase of banking performance.

The renewed optimism is tied to how banks are improving their underlying systems and how they interact with customers.. In practical terms, better data and AI can help banks monitor accounts more accurately, reduce friction in decision-making, and tailor engagement in ways customers notice—whether that means faster onboarding, smarter offers, or more responsive service.

At the same time, deposit momentum appears to be returning after a period when many savers looked at safer, liquid options—or shifted attention to mutual funds and equities.. Shetty said consumers still channel large sums into SIPs and mutual funds, but recent market correction has increased interest in fixed deposits again.. For banks, that timing matters: credit growth can be constrained if deposits don’t move at a pace lenders can fund.

So banks are responding with new product ideas aimed at keeping savings steady.. Shetty pointed to innovations like savings accounts with repo-linked interest and flexible fixed deposit structures designed to reduce breakage costs for customers.. The underlying message is simple: if banks want stable funding, they need to compete on trust and terms, not just on headline rates.

There is also a clearer sense of how lenders are handling risk.. On retail unsecured lending, Shetty described a “big cleanup” over the last two to three years, as lenders refined risk assessments and moved away from heavy reliance on multiple small-ticket personal loans in the ₹10,000–12,000 range.. He linked the improvement in portfolio quality to a learning curve partly shaped by RBI’s focus, and said the current phase looks better than the last three years.. In loan segments that were stressed earlier, even small shifts in screening discipline can change default outcomes over time.

Analysts often focus on net interest margins because they reflect how effectively banks convert deposits into income-generating assets.. Shetty suggested margins, which have been under stress, could improve as the repo rate pauses and spreads widen.. If that happens alongside better deposit growth, it can support profitability—and profitability, in turn, can help banks expand credit without taking outsized balance-sheet risks.

A major shift he highlighted is the move toward live, AI-driven intelligence for real-time risk monitoring.. Banks, he said, are using anonymised transaction data to assess a consumer’s ability to manage loans and to flag potential stress earlier.. That is less about predicting the future with certainty and more about detecting early warning signals—missed patterns, spending shifts, or strain indicators—before they become late-stage problems.

For customers, the impact is usually indirect but real.. When risk monitoring improves, lenders can price and approve more accurately, and customers may experience fewer abrupt changes in eligibility or sudden denials after a period of stable repayment.. For seniors and more conservative investors, stability is also emotional: market volatility can quickly turn “investing” into “protecting money,” which is why fixed deposits often regain attention during uncertain stretches.

Shetty said BankBazaar’s business is India-focused and not directly tied to global events, but he acknowledged that consumer sentiment, credit card spending, and broader consumption can still respond to geopolitical shocks.. He expressed hope that the worst of the West Asia conflict is behind and that a faster resolution between Iran and the U.S.. would support stability.. In a banking cycle, that kind of stability matters because spending and repayment capacity move together.

The broader trend on deposits also remains clear.. Shetty said the move of money into mutual funds and stock trading has persisted for three to four years, but the recent volatility served as a reminder—especially for those who feel financial markets are hard to time—that stability can’t be underestimated.. Banks are trying to meet that need with redesigned fixed deposit offerings, aiming to keep savings from leaking too far away from the system.

AI risk monitoring and product innovation may be the pivot

The key bet: deposits must keep pace with credit

(ANI)