New Delhi: Bank credit growth rose to 15.9% in FY 2025–26, reflecting strong demand across sectors and improved economic activity, according to official data released on Tuesday.
Total credit outstanding reached ₹212.9 lakh crore by March 2026. This marked an increase of ₹29.2 lakh crore over the previous year. The sharp rise indicated higher borrowing by businesses and individuals amid a stable interest rate environment. Moreover, government-led capital expenditure and structural reforms supported investment and credit demand.
The bank credit growth remained broad-based across key sectors. Services led the expansion, followed by personal loans, agriculture and industry. As a result, multiple segments contributed to the overall rise in lending activity.
Credit to agriculture and allied activities grew by 15.7% in FY 2025–26, compared to 10.4% a year earlier. Officials attributed this increase to sustained rural demand and improved access to formal credit. Similarly, industrial credit expanded to 15%, nearly doubling from 8.2% in the previous year, driven mainly by strong lending to micro and small enterprises.
Bank credit growth driven by services and personal loans
The services sector recorded the highest expansion, with credit growth rising to 19% from 12% last year. This increase was supported by demand from non-banking financial companies, trade and commercial real estate. In addition, the personal loan segment grew by 16.2%, up from 11.7% in the previous year.
Housing loans maintained steady growth, while vehicle loans and gold-backed lending showed strong momentum. Consequently, retail credit demand remained a key driver of overall expansion.
Officials said the strong bank credit growth highlighted resilience in the domestic economy despite global uncertainties. They noted that increased lending supported business expansion, asset creation and employment generation.
The banking sector also maintained strong fundamentals, including better capitalisation, low bad loans and steady profitability. Authorities said continued reforms and formalisation of credit would further sustain growth across sectors in the coming years.
