Festive demand drives bank credit growth to 19.5% in October

Kolkata: The festive demand helped the bank credit surge 19.5% year-on-year at the end of October, making it the new two-year high, Reserve Bank of India latest data showed.

The credit growth improved from 18.2% seen a fortnight back while credit expanded at 19.4% pace till September. The outstanding bank credit stood at Rs 231.8 lakh crore at the end of October.

Bank credit growth is being driven by three themes: higher lending to non-banking financial companies, small business units and lending against gold jewellery, CareEdge Ratings said earlier this month.


"We project bank credit growth to ease to 15%-16% year-on-year by end-March 2027 as base effects strengthen, gold loan growth normalises, while festive demand and infrastructure spending keep credit demand healthy,” the rating company's senior director Vineet Jain said.

Banks' deposit mobilisation at the end of October also strengthened to 16.9% from 16.7% a fortnight back, the central bank data showed. The outstanding deposits stood at Rs 282.5 lakh crore at the end of the reporting month.