Credit Growth Surges & Pvt Bks Holding Share; Slight Moderation Ahead

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Credit Growth Surges & Pvt Bks Holding Share; Slight Moderation Ahead

India | Financials EquityJulyResearch13, 2026

Exhibit 1 - Bank and system credit growth hasCredit Growth Surges & Pvt Bks Holding

surged

Bank Credit Growth (%, YoY) System Credit Growth (%, YoY)Share; Slight Moderation Ahead 20%

18%

15% 15%Growth in bank credit reached 18% YoY from 11% in Mar-25 & 13% in Dec-25

10% Bank credit growth surpasses system(pre-war). Total credit growth is lower at 15% vs. 11% & 13%. Post-war, from Dec-25; OPFance increased from

banks gained from surge in working capital demand & a near-freeze in the 5% Mar-25 May-25 Jul-25 Sep-25 Nov-25Mar-26Jan-26 Mar-26 May-26

Source: RBI, Jefferiesbond/ECB market. Even as this normalizes towards 14-15% by Mar-27, it .

will still be healthy. PSUs continue to grow loans faster than private, but gap Exhibit 2 - Corporate and agri-growth improved

is just 1ppt vs 4ppt last year; FCNR (B) inflows can improve private banks' most

funding & aid growth. BankMar-25credit growthDec-25 (%,May-26YoY)

25%

20% 18% 19%

Bank credit growth surges with rise in demand and market share gains. Growth in bank 15% 10% 12% 15% 12% 14% 15% 11% 15% 10% 14%

credit has improved to 18% YoY in May-26, higher than 11% in Mar-25 and 13% in Dec-25 (pre- 10%5%

war levels). At the system level (adding bonds, CP, ECB) credit growth has improved to 15% 0% Agri Retail Overall bank credit Corporate

.

in May-26 vs. 11% in Mar-25 and 13% in Dec-25. These reflect a rise in credit demand with Source: RBI, Jefferies

better economic activity, rise in oil/commodity prices after WA conflict emerged, and market

Exhibit 3 - PSUs continue growing faster, but

share gains by banks as the bond and ECB markets tend to consolidate when rates rise, and gap is just 1ppt vs. 4ppt last year