India commercial funding from banks and non-bank sources rose 55.4% to ₹17.5 lakh crore in April–August 2026, as a sharp increase in bank credit outweighed weaker corporate bond issuance, the Finance Ministry’s October Monthly Economic Review showed.
Key Takeaways
- Non-food bank credit reached ₹9.8 lakh crore, up from ₹3.8 lakh crore a year earlier.
- Non-financial companies’ bond issuance fell to ₹0.3 lakh crore from ₹1.5 lakh crore as bond yields rose.
- Banks expected loan demand to remain strong in the third quarter of FY27.
India commercial funding shifts toward bank credit
Total financial resources flowing to the commercial sector increased from ₹11.2 lakh crore in April–August 2025. The figures cover funding from both bank and non-bank sources, rather than bank lending alone.
Non-food bank credit was the main contributor to the increase. By contrast, bond issuance by non-financial entities declined over the same five-month period as yields moved higher.
| Item | Details |
|---|---|
| Medium industries | Credit growth of 31.8% year over year in August 2026 |
| Micro and small industries | Credit growth of 23.0% year over year in August 2026 |
| Large industries | Credit growth of 14.9% year over year in August 2026 |
| Shipping | Credit growth of 25.6% year over year in August 2026 |
Industry and services credit expand
Overall bank credit grew 21.6% as of September 30, 2026, compared with 10.4% a year earlier. Non-food credit grew 21.4%, the ministry said.
Industry credit increased 18.2% year over year in August 2026, compared with 7.0% a year earlier. Services credit rose 24.3%, with lending to computer software services increasing 41.8%.
For background on the central bank’s sectoral reporting, the RBI’s October 2024 sectoral credit release drew on data from 41 selected scheduled commercial banks. That older release does not establish the FY27 figures.
Banks expect demand to remain strong
The ministry cited the RBI’s second-quarter FY27 bank lending survey, in which the loan-demand net response rose to 46.7 from 32.1 in the preceding quarter. Banks’ expectations net response for third-quarter demand was 43.3.
The ministry expects bank credit momentum to continue through the remainder of FY27; that is an outlook, not a completed result.
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