The financial year 2025-26 ended with year-on-year non-food credit growth of 15.9 per cent, a rise of 497 basis points from 10.9 per cent a year earlier. Aggregate credit outstanding in March 2026 reached Rs 212.9 tn, Rs 29.2 tn higher than the previous year. A low interest rate environment and a government aided capital expenditure cycle supported by structural reforms helped crowd in private investment and boost domestic credit demand.

Credit expansion was broad based, led by the services sector and followed by personal loans, agriculture and industry. Services credit, which accounts for 28 per cent of total lending, expanded by 19.0 per cent year on year driven by demand from non-banking financial companies, trade and commercial real estate. The personal loan segment, representing 33 per cent of overall credit, grew by 16.2 per cent with steady housing credit and strong momentum in vehicle loans and loans against gold jewellery. Agriculture and allied activities recorded 15.7 per cent growth, 528 basis points higher than the prior year, reflecting sustained rural demand and improved formal credit flow.

Industry credit expanded to 15.0 per cent from 8.2 per cent a year ago, with micro and small industries registering 33.1 per cent year-on-year growth, roughly three point seven times higher than in the previous year. Medium scale industries saw credit rise by 21.7 per cent. Key industrial drivers included infrastructure, basic metal and metal products, chemicals and chemical products, and petroleum and coal related segments.

Robust credit growth underscores resilience in the domestic economic environment and is expected to support business expansion and acquisition of durable goods, thereby enhancing capacity building and employment generation. Despite a challenging global backdrop with geo-economic fragmentation and geopolitical pressures, the economy demonstrated notable resilience. The banking sector remains well capitalised with historically low impaired assets and sustained profitability, which augments growth potential. Continued efforts to democratise and formalise credit have contributed to the broad based nature of lending growth.