India’s bank lending expands as GST cuts spur credit growth

As of 3 October 2025, total bank credit rose 11.4% year-on-year.

Bank credit in India continued to grow faster than deposits in early October, according to CareEdge Ratings.

As of 3 October 2025, total bank credit rose 11.4% year-on-year to $2.12t (₹192.7 lakh crore), driven by festive demand and the impact of GST rate cuts on housing, autos and consumer goods.

The pace, however, was slower than last year’s 14.1% growth due to a high base and weaker corporate and NBFC lending.

Deposits increased 9.9% to $2.65t (₹241.0 lakh crore), down from 12.2% a year earlier, as banks offered lower rates and investors sought better returns elsewhere.

The credit-to-deposit ratio slipped to 79.9%, with deposit inflows outpacing loan growth.

CareEdge said the share of bank assets deployed as credit edged up to 72.5%, whilst government investments slightly declined to 25.9%.

The short-term call rate also eased to 5.43%, below the Reserve Bank of India’s 5.50% repo rate.