Bank lending trends: Credit growth to industry slows to 7.3% in September; personal loans, NBFC funding also lose pace

Growth in bank credit to industry eased to 7.3 per cent in September 2025, compared with 8.9 per cent in the same period a year earlier, according to Reserve Bank of India (RBI) data released on Friday.On a year-on-year basis, non-food bank credit rose 10.2 per cent as of the fortnight ended September 19, 2025, lower than the 13 per cent growth seen in the corresponding fortnight of the previous year, the data showed, PTI reported.The RBI’s “Sectoral Deployment of Bank Credit – September 2025” report, based on information from 41 select commercial banks covering about 95 per cent of total non-food credit, highlighted slower expansion in key segments.Credit to industry recorded a 7.3 per cent year-on-year growth, down from 8.9 per cent a year ago. However, lending to ‘micro and small’ and ‘medium’ industries continued to grow in double digits, reflecting resilience in smaller enterprises.Among major sectors, outstanding credit to ‘all engineering’, ‘infrastructure’, ‘textiles’, and ‘vehicles, vehicle parts and transport equipment’ showed robust year-on-year growth.Credit to agriculture and allied activities expanded 9 per cent year-on-year, compared with a higher 16.4 per cent in the same period last year. Advances to the services sector grew 10.2 per cent, led by strong activity in tourism, hotels, restaurants, computer software, and commercial real estate.However, growth in credit to non-banking financial companies (NBFCs) moderated, reflecting tighter liquidity conditions and cautious lending by banks.The personal loans segment also saw a slowdown, with year-on-year growth decelerating to 11.7 per cent from 13.4 per cent a year earlier. The moderation was primarily due to weaker growth in other personal loans, vehicle loans, and credit card outstanding, the RBI said.