Now Reading: Bank credit growth hits 17%, broad-based recovery signalled
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Bank credit growth hits 17%, broad-based recovery signalled
Bank credit growth crossed 17% for the fortnight ending July 15, 2026, the highest in two years, driven by lower lending rates, supportive tax policies and better systemic liquidity. The uptick is…
Bank credit growth crossed 17% for the fortnight ending July 15, 2026, the highest in two years, driven by lower lending rates, supportive tax policies and better systemic liquidity. The uptick is broad-based across agriculture, industry, services and retail sectors, with no sector-specific bubble unlike the unsecured loan-led surge of 2022.
Credit to large industrial companies jumped to double-digit growth in the first two months of FY27, and sectors like steel, power, cement and real estate accounted for 69% of project announcements in Q1 FY27. Retail credit is growing at 14-16%, with the quality of personal loans improving after RBI's clampdown on unsecured loans. Gold loans contributed nearly a third of incremental personal loans in May 2026.
Indian Opinion Analysis
Sustained broad-based credit growth at this level is rare: before 2026, it happened only once, between October 2010 and August 2011. The current cycle differs from 2022 because no single sector is driving the rally, making it less vulnerable to regulatory tightening. The key test will be whether corporate capex, which showed a 31.9% jump in fresh investments in 2025-26, converts into actual project execution and employment. RBI's next monetary policy review will signal if the central bank sees this as overheating or sustainable recovery.
Source: livemint.com
This story was synthesised by AI from the source linked above.
