RBI BLS Q2 FY26: Loan Demand Up
Optimism Sustains Through Q4 FY26 & Q1 FY27
Lending Terms Seen Easing Further
Overview
The Reserve Bank of India released results of the 33rd round of the Bank Lending Survey (BLS), covering
30 major scheduled commercial banks that account for 90%+ of total credit. The survey—conducted for
Q2 FY26—captures assessments for the current quarter and expectations for Q3 & Q4 FY26 and Q1 FY27.
What Banks Are Seeing in Q2 FY26
- Overall loan demand (net response): 38.9% (vs. 37.5% in Q1).
- Agriculture: 39.7% | Manufacturing: 37.5% | Services: 35.2% | Retail/Personal: 37.5%.
- Lending conditions: majority saw no change; net easing at 9.3%.
Forward Outlook (Q3 & Q4 FY26, Q1 FY27)
Loan Demand Expectations:
- Q3 FY26: Overall 42.6%; Agriculture 44.8%, Manufacturing 44.6%, Infrastructure 34.5%.
- Q4 FY26: Overall net response 44.6% (strong optimism sustained).
- Q1 FY27: Overall net response 44.6% (continued upbeat sentiment).
Lending Terms & Conditions (Net Easing):
- Q3 FY26: 18.5% (further easing expected).
- Q4 FY26: 20.4% (easy conditions to persist).
- Q1 FY27: 24.1% (broad-based accommodative stance anticipated).
Key Numbers at a Glance
| Metric | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 |
|---|---|---|---|---|
| Overall loan demand (net response) | 38.9% | 42.6% | 44.6% | 44.6% |
| Lending terms (net easing) | 9.3% | 18.5% | 20.4% | 24.1% |
Sector Highlights
- Agriculture: strongest momentum in Q2 (39.7%) and leads expectations into Q3 (44.8%).
- Manufacturing: improved to 37.5% in Q2; robust at 44.6% in Q3 outlook.
- Services: optimism at 35.2% in Q2; expected to benefit from easing terms.
- Infrastructure: a key driver in Q3 with 34.5% net demand expectations.
- Retail/Personal: steady at 37.5% in Q2; seen improving with easier credit conditions.
Sector Heatmap (Compact)
| Sector | Q2 FY26 (Net Demand) | Q3 FY26 (Expectation) | Signal |
|---|---|---|---|
| Agriculture | 39.7% | 44.8% | Strong ↑ |
| Manufacturing | 37.5% | 44.6% | Rising ↑ |
| Services | 35.2% | Improving | Tailwind ↗ |
| Infrastructure | — | 34.5% | Steady → |
| Retail / Personal | 37.5% | Improving | Upbeat ↗ |
Legend: Strong
Rising
Tailwind
Steady
Upbeat
Bottom Line: Banks report broad-based demand strength in Q2 FY26 and expect
further improvement through Q3 and beyond, alongside progressive easing in lending conditions.
Coverage & Method
The 33rd BLS spans 30 major banks, representing over 90% of India’s total credit, providing a high-confidence gauge of sectoral loan demand and lending standards.
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