Bank Credit Growth Estimated At 11-13 Per Cent In H1 2026: FICCI-IBA Survey

India’s banking sector is expected to maintain steady credit growth in the first half (H1) of 2026, despite global uncertainties, according to the latest FICCI-IBA Bankers’ Survey. A majority of bankers have projected non-food credit growth in the range of 11-13 per cent during January to June 2026.

Credit Growth Outlook Remains Stable

The survey findings have indicated moderate optimism across the sector. About 46 per cent of respondents expect credit growth to remain within the 11-13 per cent range, making it the most widely held view. Around 29 per cent have anticipated growth above 13 per cent, while 17 per cent have expected it to be between 9 and 11 per cent. Only 8 per cent have foreseen growth falling below 9 per cent.

Foreign banks have largely aligned with this outlook, although a smaller proportion has expected slightly lower growth in the 7-9 per cent range.

Retail, MSME Credit: Key Drivers Of Growth

According to the survey results, the key drivers behind credit growth were high household and small business credit demand. Retail credit saw robust growth due to increased demand for home, auto, and personal loans. Meanwhile, credit demand from micro, small and medium enterprises (MSMEs) continued rising, thanks to better business conditions.

Additionally, easy access to formal financing sources supported lending towards SMEs. Bankers had remained confident in terms of growth in credit demand in sectors such as real estate, financial services, logistics, and tourism.

Slow Growth Of Industrial Credit

While retail and SME sectors witnessed a boom in credit demand, the situation wasn’t similar in the industrial sector. According to survey findings, there had been a gradual pickup of growth in the industrial sector, but the pace wasn’t rapid. Working capital credit demand witnessed growth from textiles, automobiles, pharmaceuticals, engineering goods and food processing segments.

Term loans gained demand in infrastructure, real estate, auto, auto components, and pharmaceuticals. Some emerging segments, such as data centre projects and defence-related industries, added to credit demand. As for the overall investment outlook, steady investment growth has been observed on account of infrastructure, manufacturing-related sectors, and government capital expenditure.

Policy Outlook Likely To Remain Stable

The majority of the surveyed bankers had anticipated that no change would take place in the monetary policy regime in the coming months. It implied that the bankers had found the current monetary policy stance balanced enough in terms of promoting growth and keeping inflation in check. The stable outlook of the policy regime had helped boost credit growth by ensuring stable borrowing costs and encouraging both consumption and investment activity.

Technology And Risk Management To Remain Key Focus Areas

One major trend identified in the survey was priority sector banking. Artificial intelligence (AI) has played the most important role among all technologies in shaping the banking business. Banks have used AI for improving customer service, assessing risks, and improving operational efficiency.

On the other hand, cybersecurity was recognised as the biggest challenge banks faced in the digital age. With the increasing use of digital technologies, banks have placed a stronger emphasis on securing their networks against any kind of data breach or cyber threat.

Sustainable Financing Picks Up Pace

Another major trend mentioned in the report was sustainable financing, particularly renewable energy financing. Banks have witnessed greater interest from companies in green project financing, thanks to supportive policies as well as increasing consumer preferences.

Public Sector Banks Optimistic About Credit Growth

Public sector banks seemed relatively more optimistic about the credit growth outlook compared to others. Improvements in asset quality, capital position and traction in corporate lending have made them more confident.