KVB credit growth is targeted at 18–20% for the financial year ending March 2027, with Karur Vysya Bank prioritizing retail, agriculture and micro, small and medium-sized enterprise lending. Managing Director and Chief Executive Officer Ramesh Babu outlined the guidance on October 16, 2026, while signaling a selective expansion of corporate lending.
Key Takeaways
- The FY27 advances-growth target is above the roughly 16% growth achieved in the previous financial year.
- Retail, agriculture and MSME loans dominate the portfolio; corporate lending is intended to remain capped at around 20%.
- Management expects stable near-term deposit rates and sees gold loans as a continuing growth driver.
Table of Contents
- KVB credit growth target builds on September expansion
- Corporate expansion will remain selective
- Deposit funding and gold-loan risks remain in focus
- Conclusion
KVB credit growth target builds on September expansion
Babu said the bank could achieve its 18–20% advances-growth ambition using its existing teams and systems. The guidance represents a planned acceleration from the previous financial year, rather than a completed full-year result.
The bank’s September 2026 financial results show balance-sheet advances of ₹111,015.22 crore at September 30, compared with ₹92,184.86 crore a year earlier, an increase of approximately 20%. That quarterly year-over-year comparison is distinct from management’s full-year growth target.
| Item | Details |
|---|---|
| Cost of deposits | Around 5.49%, as stated by the CEO. |
| FCNR(B) deposits mobilized | Around ₹680 crore. |
| Deposit-rate outlook | Management expects relative stability for two to three months from October 16, 2026. |
| Gold-loan risk controls | Monitoring loan-to-value ratios and initiating margin calls where required. |
Corporate expansion will remain selective
Retail, agriculture and MSME lending, collectively called RAM, accounts for 86% of advances, while corporate lending represents 14%. Babu said the bank intends to expand corporate lending but keep its share around a 20% ceiling, avoiding large-ticket exposures and participating selectively in consortium loans.
The bank is seeking opportunities in commercial real estate, trade, food processing, spinning mills and transport. It will also selectively finance non-banking financial companies, although its exposure to that segment has fallen to around 4% of the loan book from more than 8% previously.
The strategy leaves room for corporate lending to increase without displacing RAM loans as the bank’s main business.
Deposit funding and gold-loan risks remain in focus
KVB has increased deposit mobilization through dedicated sales channels as customers move savings balances into term deposits. Babu expects deposit rates to remain relatively stable over the following two to three months, supported by comfortable liquidity and foreign currency non-resident bank deposits, known as FCNR(B) deposits.
Gold loans are expected to remain an important growth driver, with Babu citing lower borrowing costs at banks than at non-banking lenders. He said KVB did not expect significant stress in its gold-loan portfolio over the following six to eight months despite concerns about deficient rainfall.
That assessment remains management’s outlook. The bank is monitoring loan-to-value ratios and making margin calls where required.
Conclusion
The remainder of FY27 will show whether KVB can deliver its targeted lending expansion while preserving its RAM-led portfolio mix. Deposit mobilization and selective corporate lending are the stated priorities supporting that plan.
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