The Indian banking sector is likely to see 9–13 per cent industrial credit growth in the January–June period of 2026, according to the Ficci-IBA survey. However, industrial credit is not expected to see a sharp acceleration; instead, there will be a steady and gradual expansion, likely supported by the ongoing revival in capital expenditure, infrastructure push, and sectoral demand recovery.
Out of the different banks, the non-food credit of small finance banks and cooperative banks is largely expected to have around 7–9 per cent credit growth, reflecting relatively conservative expansion expectations. Public sector banks display stronger confidence, with credit growth expected to be around 11–13 per cent and above 13 per cent categories. This suggests optimism anchored by improved asset quality, strengthened capital buffers, and continued traction in corporate lending, particularly amid signs of a capex revival.
The non-food credit of private banks shows a more diversified distribution of responses, though the majority are concentrated in the 11–13 per cent and above 13 per cent growth bands, indicating a selective but growth-oriented approach, supported by robust retail portfolios, MSME lending momentum, and calibrated corporate exposure strategies.
For foreign banks, growth is expected to be in the 11–13 per cent range, reflecting moderate optimism largely shaped by global liquidity conditions, capital allocation priorities, and selective participation in domestic corporate credit markets.
“Segment-wise responses indicate clear variation in expectations across bank categories. Small finance banks and cooperative banks are largely clustered in the 7–9 per cent growth range, reflecting relatively conservative outlooks on industrial credit expansion, possibly due to limited exposure to large industrial borrowers and a stronger orientation toward retail and MSME lending,” the survey said.
Among the sectors, survey responses indicate a strongly optimistic outlook for retail loan growth, with expectations heavily skewed towards high double-digit expansion. Agriculture and allied sector credit growth is expected to see around 9–13 per cent growth in the January–June period of 2026.
According to the responses, infrastructure (including power, roads, and telecom) is expected to witness high growth in demand for term loans over the next six months, followed by metals, iron and steel, real estate and construction. Auto and auto components, pharmaceuticals, textiles, and engineering goods also feature prominently among the top sectors anticipated to see increased borrowing activity. Other sectors such as chemicals (excluding pharma), leather and leather products, and rubber and plastics received comparatively fewer mentions.
The outlook for term loan demand in the next six months appears capex-heavy and infrastructure-led, with strong support from real estate and manufacturing-linked sectors. The responses reflect optimism around investment-led growth rather than consumption-driven sectors.
The demand for working capital loans is expected to witness high growth from textiles in January–June 2026. This will be followed by demand from auto and auto components and pharmaceuticals, along with engineering goods and the food processing sector.
The responses indicate that trade (wholesale & retail) is expected to witness high growth in working capital loan demand over the next six months. This is followed by transport operators and tourism, hotels and restaurants, which also received strong mentions. NBFCs and professional services complete the top five services sectors anticipated to see increased demand for working capital financing.
“The outlook suggests that term loan demand in services will be asset-heavy and expansion-driven, led by commercial real estate and financial intermediation (NBFCs), with continued recovery momentum in tourism and logistics-linked sectors. Asset-light service industries, by contrast, show limited near-term capex demand,” the FICCI-IBA survey said.
Source link
#Industrial #credit #growth #JanJune #FicciIBA #survey
