RBI’s FY 2025‑26 Credit Growth Moderates Amid Tightening Liquidity
Economy · 05 Sept 2026 · Source: Internet
The Reserve Bank of India reported a slowdown in credit expansion for FY 2025‑26, reflecting tighter monetary conditions and higher policy rates.
According to the RBI’s Annual Report released in July 2026, total bank credit grew at a slower pace compared to the previous fiscal year, as the central bank maintained the repo rate at 6.50% to curb inflationary pressures.
The slowdown was most pronounced in the commercial sector, while credit to the agriculture and MSME segments showed resilience due to targeted refinancing schemes under the Pradhan Mantri Credit Guarantee Scheme.
Liquidity tightening also led to a modest rise in non‑performing assets (NPAs), prompting banks to focus on asset quality and risk‑weighted capital adequacy, aligning with Basel III norms.