India’s bank credit growth closed the Financial year 2026 on a strong note, led by robust lending to NBFCs, MSMEs and retail borrowers, even as gold loans surged amid elevated prices, according to a report by CareEdge Ratings.
The ratings agency said the expansion will be supported by strong consumption demand. “Recent policy measures, such as rationalisation and reduction of GST rates, together with benign inflation, will help sustain retail credit demand across asset classes,” it noted.
The retail mortgage-backed loans offered by non-banking financial companies (NBFCs) and housing finance companies (HFCs) are set to expand to Rs 20 trillion by FY2028, rating agency ICRA projects.
He warned that weak governance could amplify vulnerabilities during market stress or liquidity shocks.
The Reserve Bank of India (RBI) has directed large non-banking financial companies (NBFCs) to disclose the total charges levied on customers for each loan product.
For NBFCs, loans with a ticket size below Rs 1 lakh constituted over 85 per cent of loan originations by volume in FY23.
The stakeholders also discussed prioritizing the upgradation of IT systems and cyber security amid the increase in the use of technology applications.
The governor of the Reserve Bank of India (RBI), Shaktikanta Das, launched a new 'SupTech' initiative Daksh - the central bank's advanced monitoring system - which is expected to make the supervisory processes more robust.
Microfinance was once applauded as the world's most powerful tool for eliminating poverty. The initial microfinance boom brought many benefits. But it is now widely reported that the effects of microfinance loans on poverty, health and other social outcomes have been ‘small and inconsistent'.
NBFCs will also have to report details of dividend declared during the financial year to the RBI.
