India's Banking Sector Forecasts 12-13% Credit Growth in FY26
| Category | Details |
|---|---|
| Projected Credit Growth | FY26: 12-13% (slightly above FY25: 11-11.5%). |
| Supporting Factors | Regulatory Support: Adjustments to risk weights for loans to NBFCs, deferred LCR norms. Tax Cuts: Expected boost to consumption. Softer Interest Rates: Encouraging borrowing across sectors. |
| Regulatory Changes | Rollback of Risk Weights for NBFCs: Effective April 1, 2025, a 25-percentage-point increase in risk weights was rolled back, improving credit flow to NBFCs. Deferment of LCR Norms: Postponed by one year. |
| Credit Growth Segments | Corporate Credit: 9-10% growth in FY26 (41% of total bank loans). Lending to NBFCs: Double-digit growth expected, lower than 21% growth in FY23 and FY24 (18% of corporate credit). |
| Key Insights (Crisil) | Exposure to NBFCs grew at a CAGR of 21% in FY23 and FY24, reduced to 6% in FY25. Loans to NBFCs expected to grow at a double-digit rate in FY26 but below previous highs. |