Retail borrowing and strong NBFC demand helped keep India’s bank credit growth close to 19 per cent in June
India’s banking sector continued to witness robust lending activity in June 2026, with bank credit growing 18.6 per cent year-on-year, supported by sustained demand from retail borrowers and non-banking financial companies (NBFCs), according to a report by CareEdge Ratings.
The report noted that strong domestic demand, healthy economic activity and continued retail borrowing have kept credit growth on a firm footing despite global economic uncertainties.
Retail and NBFC segments lead growth
Retail lending remained one of the strongest drivers of overall credit expansion during the month, with demand for housing, vehicle and personal loans continuing to support banking activity.
Credit extended to NBFCs also remained healthy as financial institutions increased funding to support lending across various sectors of the economy.
Services sector contributes significantly
Apart from retail lending, the services sector continued to contribute meaningfully to overall credit growth, reflecting resilient domestic economic activity and sustained business demand for financing.
The report observed that credit demand remained broad-based across multiple segments, indicating balanced growth within the banking system.
Deposit growth also improves
The report highlighted that deposit mobilisation remained healthy, helping banks maintain adequate liquidity to support continued lending.
Steady deposit growth has also helped moderate funding pressures on banks even as credit demand remains elevated.
Outlook remains positive
CareEdge Ratings expects bank credit growth to remain healthy in the coming months, supported by India’s strong macroeconomic fundamentals, rising consumption, infrastructure spending and stable financial conditions.
However, the report noted that global uncertainties, interest rate movements and external economic developments will continue to remain key factors influencing the pace of lending.
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