Credit Growth

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

Industrial credit growth seen at 9-13% in H1 2026, led by capex revival and infrastructure demand, with banks signalling steady, not sharp, expansion

HDFC Bank plans to sustain FY26 credit growth momentum but avoids FY27 guidance, citing geopolitical risks, while focusing on stable funding metrics and balanced growth

India's banking sector remains resilient in the backdrop of heightened geopolitical uncertainties, with a majority of bankers anticipating a non-food credit growth of 11-13 per cent during January-June 2026, according to the FICCI-IBA Bankers' Survey unveiled on Sunday. The outlook is supported by improving balance sheets, steady economic activity, sustained demand across multiple segments of the economy with robust retail and SME credit momentum, and early signs of revival in private capital expenditure. In contrast, industrial credit growth is expected to expand at a more measured pace, reflecting a gradual recovery rather than a sharp acceleration. The outlook suggests steady investment activity led by infrastructure development, manufacturing-linked sectors, and government-led capital expenditure. Term loan demand is expected to be largely driven by infrastructure, real estate, auto and auto components, pharmaceuticals, and emerging sectors such as data centres and defence-relat

Bank credit growth continued to exceed deposit mobilisation in FY26, highlighting persistent funding pressures for lenders despite a year-on-year improvement in both metrics

Despite a headline liquidity surplus, India's banking system faces tightening funding conditions, rising short-term rates, and persistent external pressures weighing on liquidity

NBFCs are likely to report healthy Q4FY26 earnings on steady credit demand, though elevated funding costs and geopolitical risks may weigh on margins and asset quality

The guarantee on bank loans would be provided by the National Credit Guarantee Trustee Company (NCGTC), a wholly-owned subsidiary of the government

Central bank keeps CDS cap unchanged and raises FPI debt limits in line with expanding securities stock, while aligning VRR investments with general route norms

State-owned UCO Bank on Monday reported a 19 per cent credit growth at Rs 2.62 lakh crore in the January-March quarter of FY26. Total advances were at Rs 2.20 lakh crore in the year-ago quarter that ended in March 2025, UCO Bank said in a regulatory filing. The Kolkata-based lender reported an 11 per cent rise in total deposits at Rs 3.27 lakh crore during the reporting quarter, as against Rs 2.94 lakh crore registered at the end of the fourth quarter of the preceding financial year. During the period under review, low-cost CASA deposits improved to 38.48 per cent as compared to 37.91 per cent of total deposits in the fourth quarter of the preceding financial year, it said. The bank's total business (advances and deposits) increased by 15 per cent to Rs 5.89 lakh crore from Rs 5.14 lakh crore at the end of March 2025. The government holds 90.95 per cent equity shares in the bank as of March 31, 2026.

Analysts at Ambit Capital expect Iran war to slow bank credit growth to 10-12 per cent in bear case scenario, pressure margins, and cap liquidity. It prefers private bank stocks like HDFC & ICICI Bank

Deposit competition, liquidity pressures and shifting household savings are weighing on bank margins, with a meaningful recovery expected only from the first half of FY27

Advances at select mid- and small-sized private banks grew faster than deposits in FY26, reflecting tighter funding conditions across the sector

Data from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi), and the World Bank suggests that India is a global outlier in the relative size of our credit markets

India's credit-deposit ratio remained at a record 82.5% for the fourth consecutive fortnight ended February 15, 2026, as credit growth continued to outpace deposit growth across the banking system

Prioritise opening CBS-enabled branches in tier-5 centres

Banks raise over Rs 1 trillion via certificates of deposit in early February as short-term rates ease amid surplus liquidity and rising credit demand

Budget FY27 proposes a Rs 10,000-crore SME Growth Fund, mandatory TReDS adoption for CPSEs, and expanded credit guarantees to improve equity access, liquidity, and payment discipline for MSMEs

There is greater confidence among banks to lend to MSMEs because of data availability, and clarity in terms of their business models, says Setty

India's credit growth is expected to clock 10-12% CAGR over the next five years, led by retail, MSMEs and services, outpacing deposit growth, says Brickwork Ratings