Banking system credit grows 11.3% in October 31 fortnight: RBI data

Banking system credit grew 11.3 per cent year-on-year (Y-o-Y) in the fortnight ended October 31, slightly below the 11.5 per cent Y-o-Y growth registered in the previous fortnight ended October 17, latest data by the Reserve Bank of India (RBI) showed.

 

Meanwhile, deposits grew 9.7 per cent Y-o-Y in the October 31 fortnight. In the previous fortnight, deposits grew 9.5 per cent Y-o-Y.

 

According to the data, banking system credit stood at Rs 193.9 trillion, while deposits stood at Rs 241.7 trillion during this period. Additionally, in the fortnight, banking system credit grew Rs 1.78 trillion, while deposits grew Rs 2.90 trillion.

 

Recently, major banks reported that they are seeing green shoots in the economy due to the combined effects of goods and services tax (GST) rationalisation, income-tax cut by the government, and rate cut by the Reserve Bank of India (RBI). These measures, they said, will augur well for credit growth in the second half of the financial year (H2FY26), after a relatively muted first half (H1FY26).

 

In H1FY26, banking system credit growth stood at 10.4 per cent Y-o-Y, while deposits grew 9.5 per cent Y-o-Y.

 

Meanwhile, rating agency Icra has revised upwards its projection of credit expansion in FY26 to 10.7–11.5 per cent from its earlier estimate of 10.4–11.3 per cent, supported by improved demand post the GST rationalisation and liquidity boosts via the cash reserve ratio (CRR) cuts.

 

“While the banks remain cautious in lending to non-banking financial companies (NBFCs) and the corporate demand is yet to see any meaningful revival, the growth is expected to be driven by the retail and micro, small and medium enterprise (MSME) segments,” the rating agency said in its note.