New Delhi, March 26 (IANS). India has seen a big jump in credit growth during the financial year 2025-26. According to a report released on Thursday, loan growth in the country has increased by 61 percent, in which strong demand from retail customers and MSME sector has contributed significantly.
According to the Yes Bank report, the total credit flow increased to Rs 25.1 lakh crore in FY 2026, which is equivalent to deposits of approximately Rs 26.1 lakh crore.
It has been said in the report that strong demand in retail, MSME and infrastructure sectors has been the main reason for this growth. However, the pace of deposit growth is slowing down from FY 2024, due to which there is some pressure on liquidity in the banking system.
For this reason, the credit-deposit (C/D) ratio has increased to 82.4 percent, which is the highest level in the last 10 years.
Retail loans are making the biggest contribution to this growth. The share of personal loans has increased from 29 percent to 33 percent. Due to tax relief and GST related benefits, people’s income has increased, due to which the ability to take loans has also increased.
Vehicle loans have emerged as the biggest driver in this segment, overtaking even housing loans from the third quarter of FY 2026.
It has also been observed in the report that now people are moving more towards secured loans, while the growth of unsecured loans has slowed down.
Improvement has also been seen in industrial credit, in which the MSME sector has played a big role. Now this sector accounts for almost one-third of the total industrial loan.
Government schemes, such as the Credit Guarantee Scheme and the new definition of MSME, have fueled this growth. Micro and small enterprises added credit worth Rs 2.38 lakh crore this year, while medium enterprises contributed Rs 63,000 crore.
However, the report also expresses caution for the future. Credit growth may slow down in FY2027 as rising oil prices, weak exports and food inflation may impact economic activity.
Apart from this, the impact of GST benefits may also impact the demand for loans.
–IANS
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