Bank credit growth up by 15.9% to ₹213 lakh crore by March 2026. Agri credit grows by 15.7%

Ziraat Times News Desk

New Delhi, May 5: Scheduled Commercial Banks (SCBs) recorded robust credit growth of 15.9 percent in the financial year 2025–26, reflecting strong economic activity and rising demand for loans across sectors, according to official data released on Tuesday.

Data shared with Ziraat Times showed that aggregate non-food credit outstanding reached ₹212.9 lakh crore by March 2026, marking an increase of ₹29.2 lakh crore compared to the previous year. The growth represents a sharp rise of nearly 497 basis points from 10.9 percent recorded in FY25.

Officials attributed the surge to a combination of low interest rates, increased government capital expenditure, and improved investor confidence, which together boosted credit demand among corporates and individual borrowers.

The credit expansion was broad-based, with the services sector leading the growth, followed by personal loans, agriculture, and industry.

Agriculture Credit Gains Momentum

Credit to the agriculture and allied sectors grew by 15.7 percent in FY26, up significantly from 10.4 percent in the previous year. The increase has been linked to sustained rural demand and improved access to formal credit channels.

Officials noted that ongoing efforts to formalise rural lending and enhance financial inclusion have contributed to stronger credit uptake in the farm sector.

Industrial Lending Doubles Pace

Credit deployment to the industrial sector accelerated to 15 percent, nearly doubling from 8.2 percent recorded in FY25. The growth was largely driven by increased lending to micro, small, and medium enterprises (MSMEs).

Micro and small industries recorded a sharp 33.1 percent rise in credit, while medium-scale industries saw a 21.7 percent increase. Key sectors driving industrial lending included infrastructure, metals, chemicals, and energy-related industries.

Services Sector Leads Growth

The services sector, accounting for about 28 percent of total credit, witnessed the highest growth at 19 percent, compared to 12 percent a year earlier.

The expansion was primarily driven by strong demand from non-banking financial companies (NBFCs), trade-related businesses, and commercial real estate.

Personal Loans See Strong Demand

The personal loans segment, which constitutes roughly 33 percent of overall credit, grew by 16.2 percent in FY26, up from 11.7 percent in the previous year.

Officials said demand remained strong for vehicle loans and gold-backed loans, while housing credit continued to grow steadily.

Economic Resilience Reflected

The government said the strong credit growth underscores the resilience of the domestic economy despite global uncertainties, including geopolitical tensions and economic fragmentation.

“The robust expansion in credit reflects growing confidence among businesses and consumers, supporting investment, consumption, and job creation,” officials said.

They added that India continues to remain one of the fastest-growing major economies, supported by a well-capitalised banking system with low levels of stressed assets and sustained profitability.

The banking sector’s ability to support credit expansion, coupled with ongoing policy reforms and financial inclusion efforts, is expected to further strengthen economic growth in the coming months.