New Delhi, April 19 (IANS). India’s banking sector remains strong, supported by improving asset quality, strong capital base, credit demand in the retail and SME sectors and recovery in private capital spending. This information was given in a survey on Sunday.
The FICCI and Indian Banks Association (IBA) survey said the outlook for growth in the banking sector in the near term is broadly positive, supported by strong balance sheets, stable economic activity and sustained demand across various sectors of the economy.
Surveyors believe that the current monetary policy will remain broadly stable in the coming months, indicating that the current policy framework is appropriately adjusted to maintain the balance between growth and inflation.
Only all respondents from cooperative banks in the survey expected an interest rate hike of 25 basis points.
The survey said expectations regarding credit demand remain positive, and banks are expecting continued growth in non-food credit demand.
Public sector banks (PSBs), meanwhile, appear particularly confident about the future, reflecting better asset quality, stronger capital positions and growing interest in corporate loans.
Private banks in the survey displayed a balanced and selective approach towards credit growth, while foreign banks showed moderate optimism in line with their concentrated investment in the corporate and institutional sectors.
Regionally, loan demand from the service and retail sectors is expected to remain a key driver of credit growth. The outlook for the services sector reflects strong expansion expectations, supported by activity in real estate, financial services, logistics and tourism-related industries.
About 46 per cent of participants expect overall non-food credit growth to be between 11 per cent and 13 per cent.
Retail loans are also projected to remain strong, further strengthening its role as a key pillar of growth for the banking sector.
The survey said demand for loans to small and medium enterprises (SMEs) is expected to be particularly strong, as those surveyed expressed high confidence in continued expansion in the sector. This reflects better business activity in small enterprises, more formalization of credit channels and policy emphasis on supporting the growth of MSMEs.
Banks cited cyber security risk as the biggest challenge they face. A total of 24 banks, including public sector banks, private sector banks, foreign banks, small finance banks and co-operative banks, participated in the survey conducted between January and February 2026.
–IANS
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