Scheduled Commercial Banks Reports 15.9% Credit Growth in FY26 as Lending Rises Across Sectors

As per the PIB report, Scheduled Commercial Banks (SCBs) recorded 15.9% growth in non-food credit in FY2025-26, according to figures released by the Finance Ministry on May 5. The growth was higher than 10.9% reported in the previous financial year. 

Outstanding bank credit stood at ₹212.9 lakh crore in March 2026, rising by ₹29.2 lakh crore from a year earlier. The increase in lending was reported across services, industry, agriculture, and retail loan segments. 

Services Sector Records Faster Expansion 

Credit to the services sector grew 19% year-on-year in FY26, compared with 12% growth in the previous year. The segment accounted for around 28% of total bank credit during the period. 

Higher lending to non-banking financial companies (NBFCs), trade businesses, and commercial real estate contributed to the increase. The services segment recorded the highest growth among major sectors during the financial year. 

Industrial Credit Sees Improvement 

Industrial credit growth rose to 15% in FY26 from 8.2% a year ago. Lending to micro and small industries increased 33.1% year-on-year, while medium industries recorded 21.7% growth. 

Infrastructure, metal products, chemicals, petroleum products, and related industries were among the sectors with higher credit offtake during the year. 

The Finance Ministry said lending activity in the industrial segment reflected increased borrowing requirements from manufacturing and infrastructure-linked sectors. 

Agriculture Lending Grows 

Credit to agriculture and allied activities expanded 15.7% in FY26 against 10.4% growth recorded in the previous financial year. 

The ministry attributed the increase to sustained rural demand and formal credit flow to the farm sector. Growth in agricultural lending was also supported by continued borrowing from allied activities linked to the rural economy. 

Personal Loans Continue to Rise 

Personal loans grew 16.2% during FY26 compared with 11.7% growth in the previous year. The segment accounted for nearly one-third of total outstanding bank credit. 

Housing loan growth remained steady during the period, while vehicle loans and loans against gold jewellery recorded higher demand. 

The Finance Ministry said the banking sector remained adequately capitalised with lower impaired assets and stable profitability levels despite global geopolitical and economic uncertainties. 

Read More: RBI Urges Caution Over Misleading Loan Waiver Campaigns! 

Conclusion  

Bank lending growth accelerated in FY26, with services, personal loans, agriculture and industrial sectors recording higher credit offtake during the year. 

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