Share of individuals in total bank credit up 70 bps to 47.2% in Q1FY26

FY26 Q1 Credit Report: A Shifting Landscape

The Reserve Bank of India (RBI) has released its latest data revealing a fascinating shift in the Indian credit market during the first quarter (April-June) of FY26. While overall bank credit growth decelerated, a closer look reveals intriguing trends within specific sectors.

Key Highlights:

• Year-on-year bank credit growth slowed: From a robust 15% in June 2024 to a more moderate 9.9% in June 2025.
• Individuals drive credit growth: Their share of total credit surged to 47.2%, up from 46.5% in Q1FY2025, outpacing other sectors.
• Women leading the charge: Credit growth for female borrowers continued its impressive outperformance, increasing their share of individual credit to 23.7%.
• Personal loans dominate: These loans grew faster than overall credit, reaching a commanding 32% of total credit by June 2025, with housing loans representing over half of this segment.

Industrial Credit Slowdown

In contrast to the robust individual credit growth, industrial credit showed signs of slowing.

• Marginal decline in share: Industrial credit's share of total credit dipped slightly to 23.3% in Q1FY26 from 23.8% a year earlier.
• Growth rate slows: Year-on-year growth decelerated to 7.6% from 11.3% in the same period last year.

Public Sector Strength

The public sector demonstrated resilience amidst the changing credit landscape.

• Credit growth rebound: Public sector organizations witnessed a significant turnaround, with credit growth rising to 11.3% compared to a -1.7% decline a year ago.
• Increased market share: Their share in total credit reached 13.7%.
• Public sector banks lead the way: Public sector banks maintained their dominant position with a 53.7% share of total credit, outpacing private (8.3%) and foreign (8%) banks.

Geographic Distribution and Interest Rates

The data also highlights shifts in geographic lending and interest rates.

• Metropolitan areas still dominate: Metropolitan branches continue to account for the majority of bank loans, although their share slightly decreased to 59.7% from 60.6% a year ago.
• Lower interest rates gaining traction: The easing repo rate has resulted in a significant increase in loans with interest rates below 9%, reaching 54.1% in June 2025 from 43.2% a year ago.

Published on August 29, 2025