Bank Credit Growth Slows to 10.2% in June 2025; Services and Personal Loans Ease
India’s banking sector witnessed a moderation in credit growth in June 2025, with
non-food bank credit rising by 10.2% year-on-year (y-o-y) as of the fortnight ending
June 27, 2025. This is a notable slowdown compared to the 13.8% growth recorded
in the same period last year, according to the Reserve Bank of India’s (RBI)
sectoral credit deployment data, which covers
41 major scheduled commercial banks accounting for 95% of total non-food credit.
*Agriculture and Industry Growth Slows*
- Credit to agriculture and allied activities: Up 6.8% (vs 17.4% last year).
- Credit to industry: Grew 5.5% (vs 7.7% last year).
- Bright spots: Micro, small & medium industries stayed strong;
engineering, construction, and textiles saw accelerated loan growth.
*Services Sector Loses Momentum*
- Credit growth to services: Slowed to 9.6% (from 15.1% in June 2024).
- Reason: Decelerated lending to non-banking financial companies (NBFCs).
- Resilient segments: Computer software and professional services remained strong.
*Personal Loans Still Strong, But Easing*
- Personal loan growth: 14.7% (down from 16.6% last year).
- Reason: Slower growth in vehicle loans, credit card dues, and other personal loans.
Key Takeaway: The June 2025 credit data reflects a broad cooling in loan
growth across sectors. Banks may need to focus on reviving credit demand in
agriculture and industry to sustain momentum in the coming quarters.
