India's banking sector maintained strong credit expansion in June 2026, with overall bank credit growing 18.6% year-on-year to approximately Rs 219 trillion, according to a report by Haitong Securities.
Non-food credit, a key indicator of private sector activity, expanded at a similarly robust 18.3% pace during the same period.
As previously noted by Handelsavisen, the divergence between bank credit growth and deposit accumulation is likely to persist, creating liquidity management challenges for lenders.
The sustained lending growth was primarily fueled by healthy demand in retail lending, alongside significant credit flows to non-banking financial companies (NBFCs) and the commercial real estate (CRE) sector.
This broad-based uptake suggests that domestic economic activity remains resilient, with both consumer and corporate borrowers actively seeking financing.
However, the rapid credit expansion highlights an ongoing structural imbalance within the Indian banking system.
As previously noted by Handelsavisen, the divergence between bank credit growth and deposit accumulation is likely to persist, creating liquidity management challenges for lenders.