Credit growth continues to remain in double digits, climbs to 14.4%

Bank credit growth continued to be in double-digits, rising to 14.41 per cent year-on-year for the fortnight ended January 31, the Reserve Bank said on Friday.The key number on banks’ non-food credit expansion has remained in double digits for the past five months following the GST rationalisation, and signals a revival in credit demand from both retail borrowers and corporates in recent months.

In July, credit growth was still subdued at 9.76 per cent and 9.98 per cent across the two reporting fortnights, reflecting cautious corporate borrowing and measured retail expansion. August marked a transition, with growth briefly crossing the 10 per cent mark.

The uptrend became more pronounced from September onward, with credit growth accelerating to 10.21 per cent and 10.29 per cent in successive fortnights and remaining firmly in double-digit territory thereafter. On September 3, 2025, the GST Council approved a simplified two-tier tax structure of 5 per cent and 18 per cent, a move seen as improving compliance clarity and business sentiment.

October and November consolidated the recovery, with lending growth moving past 11 per cent and hovering in the 11-11.4 per cent range. Festive demand, retail loan expansion and higher trade financing supported the steady rise.

Momentum strengthened further in December, with growth climbing from 11.63 per cent and 11.87 per cent in mid-month readings to 14.39 per cent by December 31, indicating stronger year-end corporate drawdowns and balance sheet expansion. The trend continued into January, with credit growth edging up to 14.41 per cent at month-end after a brief mid-month moderation.