Indian commercial banks’ lending up 11.8% in Q3 FY2025 on MSME demand

Credit offtake of public banks outpaced private banks.

Indian commercial banks’ credit offtake rose 11.8% year-on-year (YoY) for the Q3 FY2025 period that ended in December 2024.

Credit expansion of micro, small and medium enterprises (MSMEs) fuelled credit expansion, particularly medium enterprises and the renewable energy sector, according to CareEdge Ratings.

Credit offtake of public banks marginally outpaced private banks in Q3 FY2025, due to private banks focusing on managing their high credit to deposit ratio. A major private bank also offloaded a chunk of its loan book to other banks and investors.

In contrast, private banks outpaced public sector banks in deposit growth during the same period, CareEdge Ratings said.