Bank credit growth in India accelerates in May 2026, strong expansion in industry and services sectors

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Bank credit growth in India 2026

Highlights

Non-food bank credit grew by 17.4 percent year-on-year in the fortnight ending May 31, 2026, more than double the 8.8 percent growth seen last year.
Credit to industry rises by 17.5 percent year-on-year, with strong demand across key sectors—including infrastructure, engineering, construction, petroleum, and chemicals—covering micro, small, medium, and large industries.
Credit to the services sector rises by 20.4 percent, supported by growth of 15.4 percent in NBFCs, commercial real estate, trade, and personal loans.

This article was translated from the original. Read the original version by our correspondent here.

May 2026 Credit Data and Sectoral Trends

According to a press release from the Reserve Bank of India, data collected from 41 selected scheduled commercial banks for the fortnight ending May 31, 2026, shows widespread acceleration in sectoral bank credit distribution. These banks account for about 95 percent of total non-food credit among all scheduled commercial banks.

Non-food bank credit records a year-on-year growth of 17.4 percent, compared to 8.8 percent in the same period last year, i.e., the fortnight ending May 30, 2025. Credit to agriculture and allied activities rises by 14.9 percent, up from 7.5 percent a year ago.

Credit to industry posts a strong annual growth of 17.5 percent, compared to 5.3 percent in the same period last year. Micro, small, and medium industries continue to expand robustly, while growth in large industries accelerates. Key industries such as infrastructure, all engineering, textiles, construction, petroleum, coal products & nuclear fuels, and chemicals & chemical products see encouraging credit growth, while growth in rubber, plastics & their products and wood & wood products remains somewhat subdued.

Impact of Services Sector and Retail Loans

Credit to the services sector records a year-on-year growth of 20.4 percent, significantly higher than 8.4 percent in the same period last year. This surge is supported by strong growth in segments like NBFCs, commercial real estate, and trade.

The personal loan segment posts a year-on-year growth of 15.4 percent, compared to 11.1 percent a year earlier. Vehicle loans and housing continue to see steady growth, but the growth rate of credit card outstanding slows down.

The RBI also notes that from December 31, 2025, the definition of the last reporting fortnight has been changed to be based on the last day of the month. As a result, annual growth rates after December 2025 are based on current year month-end data and comparative data from the previous year under the old definition.

Our previous report on May 2026 discussed the sharp rise in industrial production (IIP) to 5.1% and the contribution of segments like electricity generation, manufacturing, and water supply. The same article highlighted the implementation of the new IIP series and Producer Price Index methodology, as well as strong investment signals from a 12.9% increase in capital goods.

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