Non-food bank credit grew 14.3% year-on-year in February, up from 11.1% a year ago, broadly in line with recent months, the report said.
Retail lending supports overall growth
Personal loans continued to play a key role, growing 15.2% year-on-year and accounting for a significant share of total credit. Within this, vehicle loans rose 17.1%, while housing loans grew at 11%.
Gold loans saw a sharp rise of 127.9% year-on-year, supported by elevated gold prices and reclassification of certain agricultural gold loans into the retail segment, the report noted.
However, credit card outstanding growth slowed to 1.7%, compared with 11.2% a year earlier.
Industry and MSMEs contribute to momentum
Credit to the industrial sector increased 13.5% year-on-year in February, with growth seen across sectors such as engineering, chemicals, infrastructure and construction.
The report highlighted that lending to micro, small and medium enterprises (MSMEs) continued to grow faster than to large industries, leading to a gradual increase in their share of industrial credit.
Services sector remains robust
Credit to the services sector grew 16.3% year-on-year, driven by segments including trade, tourism, aviation and software.
Lending to non-banking financial companies (NBFCs) rose 20.9%, with outstanding credit reaching ₹19.4 lakh crore. Commercial real estate credit also expanded by 17.4%.
Agriculture lending stays steady
Credit to agriculture and allied activities grew 12.3% year-on-year. After adjusting for reclassification of agri-gold loans, growth is estimated at around 13.4%, the report said.
Risks and technical factors remain
The report noted that part of the increase in credit growth reflects changes in the fortnightly reporting framework under the Banking Laws (Amendment) Act, 2025.
It also flagged potential risks from geopolitical developments and supply-side pressures, particularly for export-oriented MSMEs, which could affect borrowing patterns and funding requirements.
Overall, credit growth remained broad-based across sectors at the end of February, supported by demand across retail, services and industry, according to CareEdge Ratings.
