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Bank Credit Growth Hits 15.9% in FY26, Led by Gold Loans and NBFCs

Non-food bank credit in India rose 15.9% year-on-year in FY26, reaching approximately Rs 213 trillion by March 31, 2026. Retail lending remained a key driver, with gold loans surging 123% YoY, while home loan growth was steady at 11.5%. Lending to NBFCs grew 26% YoY, and industry credit improved by 15%, with large industry hitting a multi-month high of 9%. The report cautioned that geopolitical risks and a change in RBI reporting format could impact future growth figures.

Key Points: Bank Credit Growth Rises 15.9% in FY26: Report

  • Non-food credit rose 15.9% YoY to Rs 213 trillion
  • Gold loans surged 123% YoY
  • NBFC lending grew 26% YoY
  • RBI format change may overstate growth
2 min read

Bank credit growth rises 15.9% in FY26, driven by retail, NBFC and industry segments: Report

Non-food bank credit rose 15.9% in FY26, driven by retail, NBFC, and industry segments. Gold loans surged 123% YoY, while home loans grew 11.5%.

"A significant portion of the overall credit growth acceleration is being driven by large industry, which has reached a multi-month high of 9 per cent YoY, along with NBFCs. - ICICI Bank Report"

Mumbai, May 5

The domestic banking sector recorded strong credit growth in FY26, with non-food credit rising 15.9 per cent year-on-year, supported by broad-based growth across key segments, according to a report by ICICI Bank.

The report noted that outstanding non-food credit stood at around Rs 213 trillion as of March 31, 2026, with growth accelerating to above 16 per cent YoY.

Non-food credit is basically all the money banks lend to everyone except for the government's food procurement agencies. Think of it as the everyday credit that keeps the economy moving. It is divided into four main areas including, Personal Loans, Business/Industrial Loans, Agriculture Loans, and Services loans.

The report mentioned that retail lending remained a key driver, with growth improving to 16.2 per cent YoY. This was largely led by a sharp rise in gold loans, which grew 123 per cent YoY.

Home loan growth was relatively steady at 11.5 per cent YoY, while retail growth excluding gold loans was lower at around 12 per cent.

Other personal loans also saw improvement, growing 13 per cent YoY, although credit card growth remained muted at 3.5 per cent YoY, indicating some moderation in unsecured lending segments.

Among other sectors, lending to non-banking financial companies (NBFCs) saw strong momentum, growing 26 per cent YoY, while credit to commercial real estate (CRE) rose 18 per cent YoY. Industry credit also improved, recording a growth of 15 per cent YoY.

The report highlighted that a significant portion of the overall credit growth acceleration is being driven by large industry, which has reached a multi-month high of 9 per cent YoY, along with NBFCs. However, it cautioned that this trend may be net interest margin (NIM) dilutive for banks.

The report also flagged that geopolitical risks remain an important factor to monitor, as they could have implications for future credit growth and asset quality.

At the same time, it pointed out a technical aspect in the data reporting. The Reserve Bank of India (RBI) has changed its reporting format from alternate Fridays to mid-month and month-end reporting. The current data compares March 31, 2026 with April 4, 2025, which may lead to a slight overstatement in growth figures.

This is because banking activity typically peaks in the last one to two business days of a reporting period, which can inflate the reported numbers.

- ANI

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Reader Comments

P
Priya S
Great to see home loans still steady at 11.5%. Middle class is still investing in property despite high prices. But credit card growth being muted is also a sign people are being cautious with debt. Smart move.
V
Vikram M
Good growth numbers but I'm skeptical about the 15.9% figure when the RBI changed reporting format. Comparing March end with April start can inflate the data. Need to see next quarter's trend to know the real story.
R
Rohit P
Happy to see NBFCs getting credit growth of 26% - they are the lifeline for small businesses and rural entrepreneurs where big banks often don't reach. Hope this translates into more jobs and economic activity in tier-2 and tier-3 cities. 🤞
S
Sarah B
As someone who works in the banking sector, the shift to mid-month reporting by RBI is a big deal. It will give a more accurate picture of average credit levels rather than just end-of-quarter spikes. Good move for transparency.
N
Nikhil C
Gold loans up 123%? That's crazy! People are clearly liquidating gold jewelry for cash. Maybe inflation pressure or simply easier access because of digital gold loan platforms. Either way, banks need to be careful about repayment capacity.
S
Siddharth J

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