Non-food bank credit growth decelerates to 12% in March 2025, says RBI

The data released by RBI, compiled from 41 select scheduled commercial banks (SCBs) that account for nearly 95 per cent of total non-food credit, highlights notable trends across key economic sector

Non-food bank credit growth slowed to 12 per cent year on year in March 2025, as of the fortnight ending March 21, said Reserve Bank of India(RBI). The data excludes the impact of the merger of a non-bank with a bank. This marks a slowdown compared to the 16.3 per cent growth recorded in the same period last year. 

 

The data released by the RBI, compiled from 41 select scheduled commercial banks (SCBs) that account for nearly 95 per cent of total non-food credit, highlights notable trends across key economic sectors.

 

Agriculture and Industry

 

Credit to the agriculture and allied activities sector grew 10.4 per cent YoY, significantly lower than the 20 per cent growth seen in the corresponding fortnight of the previous year. Meanwhile, credit to the industrial sector maintained a steady 8 per cent growth, mirroring the pace of last year.

 

Within industry, sub-segments like petroleum, coal products and nuclear fuels, basic metal and metal products, all engineering, and construction witnessed stronger credit growth. However, lending to the infrastructure segment showed signs of deceleration. 

 

Services Sector

 

The services sector saw a 13.4 per cent increase in bank credit, a notable drop from 20.8 per cent in the same period last year. ''The slowdown was largely attributed to reduced credit expansion to non-banking financial companies (NBFCs)'', said RBI.

 

However, segments such as professional services and trade continued to post healthy growth rates.

 

Personal Loans

 

Growth in the personal loans segment also slowed, rising 14 per cent YoY compared to 17.6 per cent a year ago. The moderation was mainly due to a slowdown in vehicle loans, credit card outstanding, and the 'other personal loans' category.

 

The overall trend suggests a deceleration in lending momentum across key sectors. The data points to a broad-based moderation in credit growth, reflecting tightening credit conditions and possibly cautious borrowing amid evolving macroeconomic dynamics.