Industry and services sectors see 20%-plus credit offtake growth

Bank credit growth accelerated sharply across major sectors as of July 2026, with non-food bank credit expanding 19.1% year-on-year to Rs 219.60 lakh crore, nearly doubling from the 9.9% growth recorded during the corresponding period a year ago, according to data released by the Reserve Bank of India (RBI) on Monday.

Industry and services sectors, which showed over 20% growth in credit offtake, led the surge. Credit to industry emerged as one of the key drivers of the expansion, growing 20% year-on-year as of July 31, compared with just 6.5% during the corresponding period of the previous year.

While the large industry segment showed a 17.7% growth in credit offtake to Rs 32.28 lakh crore, compared with 1.6% a year ago, the medium segment reported a growth of 30.5% to Rs 4.79 lakh crore, against 15% last year. The micro and small segment registered 22.6% growth to Rs 10.92 lakh crore, compared with 20.9% a year ago, according to RBI data.

The sharp acceleration points to a broad-based strengthening in credit demand, with industry, services, agriculture and personal loans all registering faster growth than a year earlier. Within industry, credit growth to both large and medium industries accelerated, while lending to micro and small industries maintained steady growth.

The increase was spread across several major industrial segments. Infrastructure recorded buoyant credit growth, while lending to basic metals and metal products, engineering, chemicals and chemical products, petroleum and coal products and nuclear fuels, and textiles also registered strong year-on-year expansion.

The sharp rise in industrial credit assumes significance as it comes against a backdrop of stronger overall economic activity and could indicate improving demand for working capital and investment financing by companies.

The services sector recorded an even faster expansion. Bank credit to services grew 22.9% year-on-year in the July 31 fortnight, more than twice the 10.2% growth registered in the same period last year, RBI data shows. The acceleration in services credit was supported by stronger lending to non-banking financial companies (NBFCs), trade and commercial real estate.

The increase in bank funding to NBFCs also comes as financial intermediaries continue to play a significant role in expanding credit to households and businesses. The personal loans segment, meanwhile, grew 16.2% year-on-year, up from 11.9% during the corresponding fortnight of 2025.

Housing and vehicle loans continued to sustain double-digit growth, indicating that household demand for these forms of credit remained firm. However, growth in credit card outstanding and loans against gold jewellery moderated during the period.

Loans against gold jewellery rose 88.1% to Rs 5.52 lakh crore as of July 2026, compared with 136.4% a year ago. Credit card outstanding rose marginally by 2.3% to Rs 2.97 lakh crore. Housing credit growth increased by 11.3% to Rs 34.28 lakh crore, RBI said.

Agriculture and allied activities also witnessed a substantial improvement in credit growth. The RBI data suggests that the credit expansion is not confined to a single segment of the economy despite global uncertainties, supply disruptions and trade issues.

Instead, the acceleration is visible across productive sectors as well as retail lending. Overall, the data points to a significant strengthening in the transmission of economic activity into bank lending, with businesses, financial institutions, farmers and households all accessing more credit than they did a year ago.

George Mathew is an Associate Editor with The Indian Express, based in Mumbai. A veteran of financial journalism with nearly three decades of experience, he is one of the country’s most authoritative voices on banking, regulation, and the corporate sector.

Expertise & Focus Areas Mathew’s reporting covers the nerve center of India’s economy. His specialized beats include: The Reserve Bank of India (RBI): He has tracked the central bank's policy evolution through the tenures of multiple Governors, offering deep insights into monetary policy, repo rates, and banking regulation.

Banking & Insurance: Extensive coverage of public and private sector banks, non-performing assets (NPAs), and key legislative reforms like the Insurance Amendment Bills. Corporate Affairs: Mathew frequently breaks major stories related to India's largest conglomerates, with a specific focus on the Tata Group, documenting boardroom shifts and strategic decisions.

Financial Markets: Reporting on the complexities of Foreign Portfolio Investors (FPIs), IPOs, and currency fluctuations. Authoritativeness & Insight With a career dating back to the late 1990s, Mathew possesses a rare institutional memory of India’s financial liberalization and market crises.

His work is not limited to daily news; he frequently contributes to the "Explained" section, where he decodes complex financial legislations and market trends for a broader audience. His rigorous reporting has also been featured in scholarly platforms like the Economic and Political Weekly (EPW).

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