Bank credit growth accelerates to 14.6% in January 31 fortnight: RBI data | Banking
After a relatively subdued first half of calendar year 2026, credit growth accelerated sharply in the fortnight ended January 31, increasing 14.6 percent year-on-year (y-o-y). Deposit growth also remained strong, increasing 12.5 percent year-on-year during the same period.
Bank credit in the economy stood at ₹204.75 trillion, while deposits stood at ₹248.81 trillion. Credit grew by ₹3.41 trillion, or 1.7 percent, and deposits by ₹3.82 trillion, or 1.6 percent during the period, according to data released by the Reserve Bank of India (RBI).
Bank credit growth in the first half of 2026 (January 15) slowed to 13.1 percent year-on-year, while deposit growth also slowed to 10.6 percent year-on-year. Credit contracted by ₹1.88 trillion, while deposits contracted by ₹3.57 trillion at the end of the fortnight.
In the last fortnight of calendar year 2025 (December 31), bank credit increased by 14.5 percent year-on-year and deposits by 12.7 percent year-on-year.
The resumption of credit growth was aided by GST rationalization on products and services, rate cuts by the RBI and an increase in demand for wholesale credit. The latter is explained by high yields on corporate bonds and a faster transmission of bank lending rates, which reduced the rate spread between loans and bonds.
Credit growth is expected to accelerate further towards the end of FY26.
Recently, the country’s largest lender, State Bank of India (SBI), revised its credit growth forecast for FY26 upwards from 12-14 per cent to 13-15 per cent.
For SBI, corporate credit is expected to maintain double-digit growth, while the retail, agriculture and MSME (RAM) segment will remain the key driver. MSME lending, in particular, is likely to benefit from improved business sentiment and better availability of data and information.
According to Chairman CS Setty, trade agreements are extremely positive for the economy and the economy as a whole can have a positive impact in several ways. “I see many areas where SBI is well positioned to take advantage of the emerging scenario,” he said, adding that trade agreements with the EU, Oman, New Zealand and the US indicate that market diversification is now possible for Indian companies. Apart from businesses, a large number of MSMEs will also benefit, he said.
