Bank credit growth witnessed a significant increase in July 2026, with non-food bank credit rising to 19.1 per cent year-on-year during the fortnight ending July 31. Data released by the Reserve Bank of India (RBI) reveals that this growth is nearly double the 9.9 per cent recorded in the same period last year, indicating a widespread enhancement in lending across various critical segments of the economy.

The RBI’s analysis, based on data from 41 selected scheduled commercial banks that constitute approximately 95 per cent of total non-food credit from all scheduled commercial banks, highlighted notable credit expansion across sectors such as agriculture, industry, services, and personal loans.

Accelerated Industrial and Services Credit

Credit to the industrial sector recorded an impressive growth rate of 20 per cent year-on-year in July 2026, substantially higher than the 6.5 per cent noted during the corresponding period in the previous year. Within the industrial category, lending surged in several areas, notably infrastructure, basic metals and metal products, engineering, chemicals, petroleum, coal products, nuclear fuels, and textiles.

The services sector surpassed other major segments, with credit growth reaching 22.9 per cent year-on-year in July, in stark contrast to the 10.2 per cent growth recorded a year earlier. The RBI attributed this robust acceleration in services credit to vital segments including non-banking financial companies (NBFCs), trade, and commercial real estate.

Growth in Agriculture and Personal Loans

The agriculture and allied activities sector also experienced significant credit growth, registering an increase of 17 per cent year-on-year in July compared to 7.3 per cent during the same fortnight the prior year. In the personal loans category, credit strength improved to 16.2 per cent from 11.9 per cent a year ago, with both housing and vehicle loans continuing to demonstrate double-digit growth.

However, certain areas of personal lending reflected a moderation. Specifically, credit card outstanding figures and loans against gold jewellery observed a slowdown in growth during this period.

Broader Implications of Credit Growth

The data from the RBI emphasises that the surge in bank credit is not confined to a single sector; rather, it illustrates significant growth across industry, services, and agriculture. Both large and medium industries benefitted from accelerated credit growth, while lending to micro and small enterprises remained steady.

This noteworthy increase in non-food bank credit, rising from 9.9 per cent in the previous year to 19.1 per cent in July 2026, aligns with stronger lending trends observed in essential sectors including industry and services. The comprehensive improvement across multiple sectors highlights the banks’ adaptive strategies to bolstering economic activity during this period.

The RBI’s report underscores that diversified lending practices are contributing to enhancing the overall economic landscape, suggesting a positive trend for the future as banks continue to respond robustly to various economic demands.

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