The domestic rating agency Crisil predicted that bank lending growth will increase from 11 percent in FY25 to up to 13 percent in FY26.

According to the agency, recent supportive regulatory actions, tax breaks that encourage consumption, and lower interest rates will all contribute to the expansion in credit.

The rating agency did caution, though, that the rate of deposit growth "bears watching".

According to Subha Sri Narayanan, the director of the agency, corporate credit, which makes up 41 percent of bank books, is expected to expand by 9–10 percent in FY26 compared to eight percent in the same period last year. Narayanan added that increased payments to non-bank credit providers will be the main driver of this acceleration.

According to the agency, downstream demand from the steel, aluminum, and cement industries will support corporate credit growth as a result of the ongoing infrastructure buildout.

It stated that businesses will be wary of borrowing due to the ongoing tariff fights.

 

It stated that greater affordability in a reduced interest rate regime in the largest segment of mortgage loans will support the 13–14 percent growth in retail credit, which makes up about a third of all loans in the system, up from 12 percent in FY26.

It predicted that loans to small enterprises and agricultural would grow steadily at rates of 16–17 percent and 11–12 percent, respectively.

The agency anticipates that the RBI's liquidity-related actions will aid banks in increasing deposits in the upcoming fiscal year.

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"While deposit growth has been constrained by tight systemic liquidity, the end of March 2025 saw liquidity turning to surplus and has remained so in April. With the RBI assuring adequate liquidity, the scenario should be more benign going ahead. This should support deposit growth and, in turn, credit growth," its associate director Vani Ojasvi said.