India’s Scheduled Commercial Banks (SCBs) ended FY 2025-26 with strong growth in non-food credit, which increased by 15.9% year-on-year. This was much higher than the 10.9% growth recorded in the previous year, showing an increase of 497 basis points.
As of March 2026, total outstanding credit reached ₹212.9 lakh crore, rising by ₹29.2 lakh crore compared to the previous year.
The growth was seen across all major sectors, including agriculture, industry, services, and personal loans. This performance reflects the strength of the Indian economy, supported by lower interest rates, higher government capital spending, structural reforms, and increasing private sector investment.
Sector-Wise Credit Growth at a Glance
The table below shows year-on-year credit growth across major sectors:
| Sector | FY 2024-25 Growth | FY 2025-26 Growth | Change (bps) |
| Agriculture & Allied | 10.40% | 15.70% | 528 |
| Industry | 8.20% | 15.00% | 680 |
| Services | 12.00% | 19.00% | 700 |
| Personal Loans | 11.70% | 16.20% | 455 |
| Overall (Non-Food Credit) | 10.90% | 15.90% | 497 |
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Sectoral Performance
Agriculture and Allied Activities
Credit growth in the agriculture and allied sector increased to 15.7% in FY 2025-26, compared to 10.4% in the previous year. This represents an improvement of 528 basis points.
The strong growth reflects steady rural demand and the increasing use of formal banking channels in rural areas. Government support for the agriculture sector also helped improve the flow of credit to farmers and rural businesses.
Industrial Sector
Industrial credit growth rose sharply to 15.0% in FY 2025-26 from 8.2% in the previous year. Major growth drivers in this sector included:
- Micro and Small Industries: Credit grew by 33.1% year-on-year, around 3.7 times higher than the previous year.
- Medium-Scale Industries: Credit increased by 21.7% year-on-year.
- Key Sectors Supporting Growth: Infrastructure, Basic Metal and Metal Products, Chemicals and Chemical Products, Petroleum, Coal Products, and Nuclear Fuels.
Services Sector
The services sector, which makes up around 28% of total credit, recorded strong growth of 19.0% in FY 2025-26 compared to 12.0% in the previous year.
The main contributors to this growth were Non-Banking Financial Companies (NBFCs), trade activities, and commercial real estate. The strong performance shows growing business confidence in service-related industries.
Personal Loans
Personal loans account for the largest share of total credit at 33%. Growth in this segment increased to 16.2% in FY 2025-26 from 11.7% in the previous year, showing an improvement of 455 basis points.
Housing loans continued to grow steadily, while vehicle loans and loans against gold jewellery recorded particularly strong growth.
State of India’s Banking Sector
India’s banking sector entered this phase of strong credit growth from a stable financial position. Banks remain well-capitalised, bad loan levels are at historically low levels, and profitability has remained stable.
This strong financial position allows banks to continue supporting rising credit demand while maintaining financial stability.
Government efforts to improve access to formal credit across the country have also played an important role in supporting broad-based credit growth. This includes lending to large businesses, small enterprises, and individual borrowers in rural and urban areas.
Broader Economic Context
India’s strong credit growth has come despite global challenges such as geo-economic fragmentation and ongoing geopolitical tensions. Even in this environment, India continues to remain one of the fastest-growing major economies in the world.
Strong credit growth also supports overall economic activity. When businesses borrow to expand operations and individuals take loans to buy assets, it helps increase industrial activity, create productive capacity, and generate employment opportunities.
The credit growth seen in FY 2025-26, therefore, reflects not only the strength of the banking sector but also the overall confidence and momentum in the Indian economy.
FY 2025-26 was a strong year for bank credit growth in India. Credit growth improved across all major sectors, and total outstanding credit crossed ₹212.9 lakh crore.
The data highlights a resilient economy supported by both business and consumer confidence. Continued policy support, structural reforms, and a healthy banking system are expected to support sustained credit growth in the coming years.
Source: PIB, Ministry of Finance
