Bank credit grows 19.1% in September as loan rates ease
RBI data released 30 October shows non-food bank credit up 19.1% year on year in September 2026, while fresh-loan rates fell to 8.51%.
Non-food bank credit grew 19.1% year on year in the fortnight ended 30 September 2026, against 11.2% a year earlier, according to the Reserve Bank of India's (RBI) sectoral deployment data released on 30 October. On the same day the RBI's lending and deposit rate release showed that banks charged 8.51% on fresh rupee loans in September, down from 8.61% in August. Faster lending at slightly cheaper rates is good news for borrowers, but the mix behind the growth matters for lenders and for anyone tracking credit risk.
What the sectoral data shows
The RBI's release gives year-on-year growth for four groups. Agriculture and allied activities grew 19.5% (8.9% a year earlier). Industry grew 19.5% (7.7%). Services grew 28.3% (9.9%). Personal loans grew 17.3% (11.5%). The release does not give rupee amounts in its text; those sit in Statements I and II in an attached Excel file, which this report did not open.
Within industry, the RBI says credit to large and medium companies accelerated while micro and small industries grew steadily. Infrastructure, basic metals, engineering, chemicals, food processing and textiles were all described as growing briskly. In personal loans, housing and vehicle loans stayed resilient and advances against fixed deposits accelerated. Loans against gold jewellery and education loans slowed from last year but remained strong. The release names non-banking financial companies (NBFCs) as a driver of the services number, which means banks are lending more to other lenders.
Reading a "year-on-year" jump
Year-on-year growth compares this fortnight with the same fortnight a year ago. A low base can flatter the comparison, and the RBI release does not say how much of the 19.1% comes from that effect or from one-off factors. What can be said is that every group in the table grew faster than a year earlier, and the gap is widest in services, where growth nearly tripled. The release gives no figure for credit cards, which are not mentioned.
What happened to loan and deposit rates
The rate release covers scheduled commercial banks, excluding regional rural banks and small finance banks. The weighted average lending rate (WALR, the average rate across loans) on outstanding rupee loans was 8.96% in September, unchanged from August. On fresh rupee loans it was 8.51%, down 0.10 percentage point. The one-year median MCLR (marginal cost of funds based lending rate, a bank's internal benchmark) fell to 8.55% in October from 8.61% in September.
On deposits, the weighted average domestic term deposit rate on outstanding deposits was 6.55% in September, down from 6.56%. On fresh term deposits it was 5.61%, down from 5.67%. The RBI says WALR moved in different directions across sectors. The sector-wise tables are in a linked Excel file that this report did not open.
Why both numbers matter together
Fast loan growth with a falling cost of fresh credit suggests banks are competing for borrowers. Fresh deposits now pay 5.61%, below the 6.55% on the older stock, so funding costs on new money are lower. The RBI releases do not say whether margins are squeezed or forecast what comes next.
What it means for borrowers and lenders
Borrowers on fresh loans may see slightly lower offered rates than in August, though offers depend on credit score and loan type. Loans tied to the MCLR could gain slightly at reset, as the benchmark fell 0.06 point. Lenders that depend on bank funding may find borrowing easier. Savers should note that fresh fixed-deposit rates are below the average on older deposits.
Every group grew faster than a year earlier. The chart shows both years, and the simulator turns a 0.10 point fall in fresh-loan rates into an EMI.
What to watch next
- The RBI's next monetary policy announcement and any signal on rates.
- The next fortnightly credit data, to see whether 19.1% holds.
- Statements I and II of the sectoral release, for rupee amounts and the full breakdown.
Key takeaways
- Non-food bank credit grew 19.1% year on year to 30 September 2026, against 11.2% a year earlier, per the RBI.
- Services credit grew fastest at 28.3%, with NBFCs named as a driver.
- The average rate on fresh rupee loans fell to 8.51% in September from 8.61% in August.
- The one-year median MCLR eased to 8.55% in October.
- The RBI releases give figures only; any reading of margins or risk is interpretation, not RBI's statement.
Sources
- [RBI: Sectoral Deployment of Bank Credit, September 2026](https://rbi.org.in/scripts/BSPressReleaseDisplay.aspx?prid=63891)
- [RBI: Lending and Deposit Rates of Scheduled Commercial Banks, October 2026](https://rbi.org.in/scripts/BSPressReleaseDisplay.aspx?prid=63894)
Tags: Bank credit RBI Lending rates Credit growth NBFC