Bank Credit

Bank credit to NBFCs rises sharply as shadow lenders shift funding sources amid high bond yields, supported by regulatory easing and improved banking liquidity

Bank credit growth slowed to 15 per cent in the fortnight ended April 15, the Reserve Bank of India (RBI) said on Wednesday. According to the latest data, the pace of lending growth slowed down to 14.88 per cent year-on-year (YoY) in the fortnight ended April 15, as compared to 15.96 per cent recorded in the preceding fortnight. During the reporting period, overall credit contracted by 2.06 per cent or Rs 4.51 lakh crore. Bank credit stood at Rs 214 lakh crore in the fortnight ended April 15, as compared to Rs 218 lakh crore during the preceding 15-day period ended March 31. The total credit stood at Rs 186 lakh crore in the fortnight ended April 18 last year, the RBI data showed. During the fortnight ended March 31, bank credit grew at the fastest pace in the last two fiscal years, as banks rushed to meet their balance sheet targets ahead of the financial year-end, resulting in a sharp increase in both loans and deposits. Bank credit growth has remained in double digits for more

In the fortnight, credit contracted by 2.1 per cent or Rs 4.39 trillion, while deposits contracted by 2.2 per cent YoY or Rs 5.81 trillion

Icra expects bank credit growth to ease below 12 per cent in FY27 as West Asia conflict, higher oil prices and deposit competition weigh on lending, margins and asset quality

Bank credit expanded at the fastest pace since FY24, driven by corporate and MSME demand, while deposit growth lagged, widening the gap in the banking system

Newer options such as acquisition financing, now allowed for banks by the RBI, should also support credit growth

Gold loans drive retail credit growth, with bank lending against jewellery doubling year-on-year in February, sharply outpacing overall retail loan expansion

Bank credit growth eased to 13.8 per cent in the March 15 fortnight, while deposit growth improved to 10.8 per cent, reflecting tax outflows and seasonal lending trends

Additionally, the share of gold loans in overall retail loans of banks has now doubled to 6 per cent (January 2026), from 3 per cent as of January 2025

Credit offtake strengthened on broad-based demand led by personal loans, MSME borrowing and services sector growth, while gold loans surged 127.6% amid reporting norm changes

Bank credit growth slowed to 13.1% and deposit growth to 10.6% in early January, RBI data shows, though FY26 credit outlook remains positive

India Ratings expects bank credit to grow 13 per cent in FY27, supported by GST rationalisation, lower inflation and improved consumption, though high loan-deposit ratios remain a challenge

Careedge expects stronger bank performance in FY26, with credit growth rising to 11.5-12.5% on consumption and corporate demand, even as weak deposit growth keeps the credit-deposit ratio high

RBI data show bank loans fell by Rs 49,468 crore in mid-October, even as annual growth improved marginally to 11.5 per cent; deposits also declined during the period

The share of outstanding bank credit in infrastructure financing has come down to 33.61 per cent - the least since FY18

Absolute outstanding bank credit amount of large enterprises declined 32.67% from March-end to July-end this year

Non-bank sources including NBFCs, equity issuances and short-term external credit offset moderation in bank lending, raising overall funding flows to the commercial sector

Crisil Ratings expects bank credit growth to accelerate in H2 FY26 to 11-12%, driven by retail loans and NBFCs, with corporate credit growth rebounding to 9.7%

Corporates increasingly turn to debt capital markets as bank credit share in fundraising hits multi-year low, signalling shift in funding dynamics

The pace of credit growth on a Y-o-Y basis in retail and industrial credit also moderated in June 2025, Reserve Bank of India (RBI) data showed