Now Reading: Bank credit growth hits 17%, broadest in over a decade
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Bank credit growth hits 17%, broadest in over a decade
Bank credit growth hit 17% by mid-July 2026, a rate not seen in two years, driven by lower lending rates, supportive tax policies and improved liquidity. Unlike the 2022-23 surge fuelled by…
The Story in Brief
Bank credit growth hit 17% by mid-July 2026, a rate not seen in two years, driven by lower lending rates, supportive tax policies and improved liquidity. Unlike the 2022-23 surge fuelled by unsecured personal loans, this uptick is broad-based across agriculture, industry, services and retail sectors. Credit to large industries has jumped to double-digit growth for the first time in over a decade, and fresh investment announcements rose 31.9% to Rs 58 lakh crore in 2025-26, with 82% being mega projects of Rs 1,000 crore or more.
The quality of retail credit has also improved, with the share of credit card debt declining after RBI's macroprudential norms. Housing, vehicle and education loans remain stable, while gold loans contributed nearly a third of incremental personal loans in May 2026. However, Livemint cautions that sustained double-digit growth across all sectors has occurred only once before, between October 2010 and August 2011, and it remains to be seen if this signals a lasting recovery or a short-lived cycle.
The Indian Opinion
The media is tempted to call this a credit boom, but a few months of double-digit growth do not make a cycle. The real test lies in what drives this rally. In 2022, unsecured personal loans inflated the numbers before RBI's curbs burst that bubble. This time, growth is unusually broad-based across agriculture, industry, services and retail. Yet, the real prize is corporate capital expenditure. If project announcements worth Rs 58 lakh crore translate into ground-level investment, the recovery will be sustainable. For now, watch the industrial credit data over the next two quarters.
Source: livemint.com
This story was synthesised by AI from the source linked above.
