Bank credit growth has accelerated to 16.5% year-on-year as at end-June 2026 from 9.9% a year earlier but the rate at which borrowing has taken place is cheaper.

Nearly two-thirds of outstanding loans in June 2026 carried interest rates below 9% compared to 54.1% a year earlier, according to the Reserve Bank of India’s latest Quarterly Basic Statistical Return (BSR) report.

The weighted average lending rate (WALR) on outstanding bank credit also fell to 9.26% in June 2026 from 9.71% a year ago, thus easing by 45 basis points.

Working capital loans grew faster than term loans. According to the RBI data, working capital credit grew 18% YoY in June 2026 compared with 13.4% a year ago. 

Term loans, which comprised 64.1% of total outstanding bank credit, grew 15.4% in June 2026 as compared to 8.3% a year earlier.

Another notable trend evident from the RBI data is that credit to female borrowers grew faster. As per the data, bank credit to female individual borrowers expanded by 19.7% in June 2026 as against 12.9% in June 2025. This was thus higher than the overall bank credit growth of 16.5% and the 15.2% growth seen in household sector. 

Personal loans also speeded up at 12.7% YoY in June 2026, but was slower than the other segments.

Credit growth remained broad-based across sectors, with finance expanding at 22.4%, trade at 18.1%, industry at 15.5% and agriculture at 15.1%.

Non-metros saw stronger credit growth at over 21% while metropolitan centres grew at 13.1% in June 2026 compared with 8.2% a year earlier. 

Loan growth in rural centre stood at 21.1% compared with 12.8% a year ago, semi-urban at 21.6% (11.8% year-ago) and urban at 21.4% (12.7%).

Across bank groups, credit growth was 17.3% for public sector banks in June 2026 compared to 11% a year ago, 14.8% for private sector banks (8.3% a year ago), 20.5% for foreign banks (8% a year ago) and 25.1% for small finance banks (16.8%).

Bank borrowings by the private corporate sector accelerated to 21.1% at end-June 2026, marked up from 7.9% in the previous year. The credit to public sector also recorded robust growth of 14.6%.