NBFCs Surpass Housing Sector as Leading Force in Bank Credit Growth
MUMBAI: In the first half of FY27, Indian banks extended Rs 16.1 lakh crore in non-food credit, with non-banking financial companies (NBFCs) receiving Rs 1.8 lakh crore, surpassing the Rs 1.4 lakh crore lent to home buyers. The total non-food credit outstanding rose 19.1% year-on-year to Rs 229 lakh crore by the end of September, reflecting a 7.5% increase since March.
Lending Trends
The industrial sector accounted for Rs 3.7 lakh crore of the incremental credit, while trade absorbed Rs 1 lakh crore. Services led the way in lending growth, with banks extending Rs 4.9 lakh crore in this category. Personal loans also saw significant growth, totaling Rs 4.5 lakh crore. Agriculture loans increased by Rs 1.8 lakh crore during the same period.
Gold loans emerged as a key driver of retail credit, with outstanding advances against gold jewellery surging 82.6% year-on-year to Rs 5.8 lakh crore. In the first half of FY27 alone, banks added Rs 1.2 lakh crore in gold loans.
Sector-Specific Insights
Within the services sector, lending to NBFCs rose 41.8% year-on-year to Rs 22.5 lakh crore. Commercial real estate advances increased by 23.3% to Rs 7.5 lakh crore, while trade credit grew by 23.9%. Overall, services credit expanded 28.3% to Rs 64.9 lakh crore, making up 30.6% of the incremental non-food lending.
Industrial credit also showed robust growth, rising 19.5% to Rs 49.8 lakh crore. Advances to large industries increased by 16% to Rs 33 lakh crore, while lending to medium enterprises grew by 33.2% and micro and small enterprises by 24.4%. Of the Rs 3.7 lakh crore in incremental industrial credit, large companies accounted for Rs 2 lakh crore and micro, small, and medium enterprises (MSMEs) for Rs 1.6 lakh crore.
Agricultural credit rose 19.5% to Rs 28.2 lakh crore, while personal loans increased by 17.3% to Rs 74.27 lakh crore. The composition of retail lending shifted towards secured advances, with loans against fixed deposits, including FCNR(B) and NRNR deposits, growing 53.3% year-on-year to Rs 2.2 lakh crore. Banks added Rs 47,471 crore in such loans during the period, which accounted for 10.6% of the Rs 4.5 lakh crore in incremental personal loans.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
