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India Banks See 11-13% Credit Growth Ahead
19 Apr
Summary
- Banks predict 11-13% non-food credit growth for early 2026.
- AI is seen as the biggest disruption, cybersecurity as the biggest risk.
- Renewable energy financing shows the strongest growth potential.
The Indian banking sector is poised for continued resilience, with bankers expecting non-food credit growth to range between 11% and 13% for the first half of 2026. This positive outlook is bolstered by strengthening balance sheets, sustained economic activity, and robust demand in retail and SME segments.
While industrial credit growth is projected to be more moderate, overall investment activity is anticipated to rise, driven by infrastructure development and government capital expenditure. Demand for term loans is expected from key sectors including infrastructure, real estate, and emerging industries like data centers.
Artificial Intelligence is identified as the most disruptive force shaping banking operations, whereas cybersecurity risks are deemed the most pressing challenge. Simultaneously, sustainable finance is gaining traction, with renewable energy financing highlighted as the segment with the strongest growth potential.
The survey, conducted in January-February 2026, involved 24 lenders. Public sector banks, in particular, express strong confidence due to improved asset quality and capital positions. Credit demand from the services and retail sectors is expected to be a primary driver of lending growth.
