Scheduled commercial banks (SCBs) registered robust non-food credit growth of 15.9 per cent in FY 2025-26, the Finance Ministry said on Tuesday, 5 May 2026, reflecting broad-based economic activity and sustained credit demand across sectors. The growth marks a significant 497 basis points (bps) jump from 10.9 per cent recorded in the corresponding period of FY25.

Aggregate credit outstanding as of March 2026 reached ₹212.9 lakh crore, a year-on-year increase of ₹29.2 lakh crore — the largest absolute addition in recent years, according to the government statement.

Broad-Based Growth Across Sectors

Credit expansion in FY26 was broad-based, led by the services sector, followed by the personal loan segment, agriculture and allied activities, and industry, the Finance Ministry noted. This multi-sector momentum signals that credit demand is not concentrated in a single pocket of the economy, but reflects wider participation.

The services sector, which contributes 28 per cent to overall credit, recorded a robust expansion of 19.0 per cent year-on-year, compared to 12.0 per cent in the same period last year. The surge was primarily driven by high demand from Non-Banking Financial Companies (NBFCs), trade, and commercial real estate segments.

Agriculture and Industry Show Sharp Acceleration

Credit to agriculture and allied activities accelerated to 15.7 per cent growth — 528 bps higher than the 10.4 per cent registered the previous year. According to the Finance Ministry, sustained rural demand and the formalisation of rural credit have been key drivers of this positive momentum in primary sector credit offtake.

Industrial credit expanded at nearly double the pace of the previous year, growing at 15.0 per cent compared to 8.2 per cent in FY25. Notably, micro and small industries outperformed with a 33.1 per cent credit growth — approximately 3.7 times higher than the previous year's pace. Medium-scale industries also recorded strong expansion at 21.7 per cent. Key drivers of industrial credit included infrastructure, basic metals and metal products, chemicals and chemical products, and petroleum, coal products and nuclear fuels.

Personal Loans Remain a Pillar of Credit Demand

The personal loan segment, which accounts for 33 per cent of overall credit, expanded by 16.2 per cent in FY26 — 455 bps higher than the 11.7 per cent growth recorded a year ago. Growth remained steady in the housing segment, while vehicle loans and loans against gold jewellery continued to show strong momentum, the ministry said.

What This Signals for India's Economy

The across-the-board credit acceleration — from farm credit to MSMEs to services — suggests that lending is tracking real economic activity rather than being concentrated in speculative segments. This comes amid the Reserve Bank of India's (RBI) ongoing monetary policy calibration, where rate decisions have directly influenced borrowing costs and credit appetite. The data will likely inform the RBI's next policy assessment. With FY27 underway, sustaining this trajectory will depend on global headwinds, domestic consumption trends, and the pace of infrastructure spending.