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Key Points

According to a State Bank of India report, bank credit growth in May 2025 slowed significantly to 9.8% from the 19.5% recorded in the same month last year. This decline indicates a broad-based slowdown in lending across various sectors, including industrial, services, and personal loans. Interestingly, while deposit growth continues, it also has decelerated compared to previous years. This trend highlights caution or shifting dynamics in the Indian banking sector as the economy progresses into the financial year 2025-26.

Key Points: SBI Report Shows Slowdown in Bank Credit Growth to 9.8%

  • SBI details a slowdown in lending for May 2025
  • Bank credit declined by Rs 15,676 crore so far this year
  • Deposit growth also slowed but remained positive overall
2 min read

Banks' credit growth slowed to 9.8% in May, compared to strong growth of 19.5% recorded last year: SBI Report

India sees banking credit growth slow to 9.8% in May, down from 19.5% last year.

"Scheduled commercial banks' credit growth slowed to 9.8 per cent. - SBI Report"

New Delhi, May 31

The credit growth of banks slowed to 9.8 per cent in May 2025 as compared to a strong growth of 19.5 per cent recorded in the same period last year, according to a report by the State Bank of India (SBI).

The report highlighted a clear deceleration in lending activity across all major sectors of the economy.

SBI said, "Scheduled commercial banks' (SCBs) credit growth slowed to 9.8 per cent as on May 16, 2025, compared to last year growth of 19.5 per cent."

During April-May this year, bank credit actually declined by Rs 15,676 crore, showing a negative year-to-date (YTD) growth of 0.1 per cent. In contrast, during the same period last year, bank credit had grown by Rs 1.68 lakh crore, or 1.0 per cent YTD.

On the other hand, deposit growth remained positive but was also slower than the previous year. Deposits grew by Rs 3.06 lakh crore (1.4 per cent YTD) during April-May this year, compared to Rs 3.39 lakh crore (1.7 per cent YTD) last year.

The report pointed out that sector-wise credit for April 2025 showed a slowdown in all sectors. Credit to agriculture and allied activities grew by 9.2 per cent, sharply lower than 19.8 per cent a year ago.

Credit to the industrial sector rose by 6.6 per cent, slightly down from 7.4 per cent last year.

However, within the industry segment, there was an increase in credit to sectors like basic metal and metal products, engineering, vehicles and transport equipment, textiles, and construction. On the other hand, credit growth in the infrastructure sector slowed down.

In the services sector, credit growth dropped significantly to 10.5 per cent from 22.0 per cent last year. This was mainly because of a sharp slowdown in lending to non-banking financial companies (NBFCs). Still, credit to segments such as trade and computer software remained strong.

The personal loans segment also saw a slowdown. Growth in this category eased to 14.5 per cent year-on-year, compared to 17.0 per cent last year. This was mainly due to reduced growth in vehicle loans, credit card dues, and other personal loans.

The overall trend indicated a broad-based slowdown in credit demand across the economy in the early months of the financial year 2025-26.

- ANI

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Reader Comments

R
Rahul K.
This slowdown is worrying but not surprising. With rising interest rates, people are thinking twice before taking loans. Even my cousin postponed his car purchase because of higher EMIs. Hope RBI takes note of this trend.
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Priya M.
The agriculture sector slowdown is most concerning! Farmers are struggling with input costs and now credit is tightening. Government should intervene with special schemes before kharif season begins 🌾
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Amit S.
Maybe this slowdown is temporary? The report mentions some sectors like metals and engineering are still doing well. Could be just cautious approach after last year's aggressive lending. Let's see next quarter numbers.
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Neha T.
Banks need to be more transparent about their lending criteria. Many small businesses in my area are complaining about sudden rejection of loan applications despite good credentials. This affects growth at grassroots level.
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Sanjay P.
Credit card dues growth slowing is good news actually! Maybe people are becoming more financially responsible after seeing so many debt trap cases. Cash is king mentality returning? 💳➡️💰
M
Meena R.
The infrastructure sector slowdown is disappointing. We need more roads, ports and power projects to boost economy. Hope this picks up soon with government's infra push under Gati Shakti.

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