Bank credit growth accelerates to 16%, shows RBI data

India’s banking sector continued to maintain strong lending momentum, with bank credit growth accelerating to 16 per cent year-on-year in the fortnight ended April 30, according to the latest data released by the Reserve Bank of India.The latest figures indicate sustained demand for loans from businesses as well as retail borrowers, reflecting continued economic activity amid evolving global conditions. Credit growth had stood at 15 per cent in the previous fortnight.
RBI data showed that outstanding credit extended by scheduled commercial banks rose to Rs 212.12 lakh crore during the reporting period. Analysts said healthy borrowing trends across sectors such as MSMEs, corporates, manufacturing, services and retail continue to support overall lending growth.
Alongside stronger lending activity, deposit growth also remained steady. Bank deposits increased 12.3 per cent year-on-year as of April 30, marginally higher than the 12.2 per cent growth recorded in the previous fortnight.The RBI data showed total outstanding deposits in the banking system stood at Rs 258.64 lakh crore at the end of the reporting period. During the fortnight, credit expanded by 1.4 per cent, or nearly Rs 2.94 trillion, while deposits rose 0.8 per cent, or around Rs 2.16 trillion.
According to the report,the credit-deposit ratio stood at 82.01 per cent at the end of April, indicating active deployment of deposits towards lending activity. Analysts view the current ratio as supportive of economic growth, though some caution that sustained increases in the ratio could eventually put pressure on liquidity conditions.
Industry experts said the latest data reflects healthy credit demand in the economy, led by MSMEs and corporates, even as banks continue to maintain adequate liquidity through stable deposit mobilisation.The fortnight ending April 30 marked the first reporting period of FY27. While FY26 witnessed robust loan growth, rating agencies and economists expect moderation in FY27 amid geopolitical uncertainties and a dynamic interest-rate environment.Economists said continued expansion in bank lending remains a positive indicator for the broader economy, as higher credit availability supports investment activity, industrial expansion, infrastructure spending and consumer demand.The latest RBI data underscores the resilience of India’s banking sector and its key role in supporting economic growth through sustained credit flow across sectors.

(Business Correspondent)