India’s banking sector witnessed a strong rise in credit growth in February 2026, reflecting improving economic activity and rising demand across key sectors. According to data released by the Reserve Bank of India (RBI), bank lending to industry and other sectors has grown at a faster pace compared to last year.
Sharp Rise in Credit to Industry
One of the key highlights of the data is the significant growth in credit to the industrial sector. Bank lending to industry grew by 13.5% year-on-year as of the fortnight ending February 28, 2026, compared to 7.5% growth during the same period last year.
This strong performance was mainly driven by increased lending to sectors such as:
- Infrastructure
- Engineering
- Chemicals and chemical products
- Petroleum, coal, and nuclear fuels
- Textiles
Additionally, loans to micro, small, and medium enterprises (MSMEs) continued to grow at a healthy double-digit pace, while credit to large industries also showed improvement.
Overall Credit Growth Remains Strong
The RBI data, based on inputs from 41 major scheduled commercial banks (SCBs)—which account for nearly 95% of total non-food credit—showed that:
- Non-food bank credit grew by 14.3% year-on-year in February 2026
- This is higher than the 11.1% growth recorded during the same period last year
This indicates sustained demand for credit across the economy.
Services Sector Leads Growth
Credit to the services sector recorded a strong growth of 16.3% year-on-year, up from 11.7% last year.
The growth was mainly supported by:
- Higher lending to Non-Banking Financial Companies (NBFCs)
- Increased credit to commercial real estate
This suggests a revival in service-related activities and investments.
Personal Loans Continue to Expand
The personal loan segment also maintained strong momentum, growing by 15.2% year-on-year, compared to 11.7% in the previous year.
Key trends in this segment include:
- Steady growth in housing loans
- Strong rise in vehicle loans
- Continued expansion in loans against gold jewellery
Agriculture Sector Shows Stable Growth
Credit to agriculture and allied activities grew by 12.3%, slightly higher than 11.4% recorded a year ago.
This indicates consistent support to the rural economy and farming sector.
Conclusion
The latest RBI data highlights a broad-based improvement in bank credit growth across sectors, including industry, services, personal loans, and agriculture. The sharp rise in industrial credit, along with strong demand in services and retail segments, signals positive momentum in the Indian economy.
If this trend continues, it could further support investment, consumption, and overall economic growth in the coming months.