Indian bank credit growth accelerates to 17.4 percent

Credit to agriculture and allied activities registered a year-on-year growth of 14.9 percent as of May 31, 2026, a notable increase from 7.5 percent in the corresponding fortnight of the previous year.

The industrial sector experienced a robust year-on-year growth of 17.5 percent, significantly higher than the 5.3 percent recorded a year ago.

This strong performance within industry was observed across various sub-segments.

'Micro and Small' and 'Medium' industries sustained their robust expansion, indicating continued vitality in these crucial segments of the economy.

Furthermore, 'Large' industries demonstrated an accelerated pace of growth, contributing substantially to the overall industrial credit deployment.

Among major industries, credit to 'infrastructure', 'all engineering', 'textile', 'construction', 'petroleum, coal products and nuclear fuels', and 'chemical and chemical products' all marked buoyant year-on-year growth.

However, two specific segments, 'rubber, plastic and their products' and 'wood and wood products', witnessed marginally subdued growth, presenting a nuanced picture within the broader industrial expansion.

This broad-based growth in industrial credit underscores a strengthening demand from various manufacturing and development-oriented enterprises.

The services sector recorded the highest growth rate among all categories, registering a substantial 20.4 percent year-on-year expansion.

This marks a significant acceleration from the 8.4 percent growth observed in the corresponding period of the previous year.

This vigorous growth in the services sector was primarily supported by accelerated credit deployment to key segments such as 'non-banking financial companies' (NBFCs), 'commercial real estate', and 'trade'.

These areas collectively contributed to the sector's strong performance, reflecting increased activity and investment.

Concurrently, the personal loans segment also demonstrated strong momentum, recording a year-on-year growth of 15.4 percent.

This compares to an 11.1 percent growth a year ago, indicating sustained consumer demand for credit.

Within personal loans, 'vehicle loans' and 'housing' segments registered steady growth, while 'credit card outstanding' showed a deceleration.

The overall non-food credit growth of 17.4 percent highlights a significant increase in credit absorption across diverse sectors of the Indian economy.