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“This resurgence appears to be primarily driven by the retail segment, supported by festive season demand and recent GST reforms,” Sachin Sachdeva, vice president, sector head – financial sector ratings, ICRA said.
He added that ICRA maintains its estimate of total credit offtake in FY26 will be Rs 19.0–20.5 lakh crore, translating to a year-on-year growth of 10.4–11.3%.
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“We believe the RBI’s measures could push credit growth in the Indian banking system toward the upper end of our 11.5%-12.5% expectation,” said Shinoy Varghese, S&P global credit analyst.
He added that most banks can accommodate this faster clip while maintaining their asset quality. “That said, risks to asset quality could arise from the easy access to funding with lighter covenants tempting corporates to increase leverage,” he said.