Crisil projects India's bank credit growth to accelerate to how much percentage in FY26?

Correct option is D

The correct answer is (D) 12-13%

• According to CRISIL's projections, India's bank credit growth is expected to accelerate to 12-13% in FY26, up from the estimated 11.0-11.5% in FY25.

• This growth is anticipated to be driven by several factors:

  • Regulatory Support: The Reserve Bank of India (RBI) has rolled back the 25-percentage point increase in risk weights for bank loans to certain categories of non-banking financial companies (NBFCs), effective from April 1, 2025. This move is expected to improve the credit flow to NBFCs.

  • Tax Cuts and Lower Interest Rates: Income tax breaks and expected lower inflation are likely to spur consumption, boosting demand for retail loans. Additionally, the RBI has reduced the repo rate by 50 basis points since February 2025, with another 50 basis points cut expected this fiscal year.

  • Infrastructure Development: Ongoing infrastructure projects are expected to drive credit demand in sectors like cement, steel, and aluminium.

• Corporate Credit Growth: Corporate credit, which accounts for about 41% of total bank loans, is projected to grow at 9-10% in FY26, up from 8% in FY25. This acceleration is primarily due to higher disbursements to NBFCs and increased investment in infrastructure sectors.

• Retail Credit Growth: Retail loans, which make up approximately 31% of total bank lending, are expected to grow at 13-14% in FY26, up from around 12% in FY25. Home loans, the largest segment within retail loans, are anticipated to benefit from improved affordability in a lower interest rate regime.

• MSME and Agricultural Credit: Credit to micro, small, and medium enterprises (MSMEs), comprising about 16% of total bank credit, is estimated to remain strong at 16-17%, supported by government initiatives and improved digital data access. Agricultural lending is likely to stay stable at 11-12%, contingent on monsoon performance.