New Delhi, Sep 11 Scheduled Commercial Banks' (SCBs) credit offtake went up 9.9 per cent on-year in the first quarter of the current financial year (Q1 FY26), a report said on Thursday.
The growth was driven primarily by increases in the housing, gold loans and vehicle finance segments, Care Edge Ratings said in a report.
Additionally, the momentum was further supported by credit expansion in the MSME segment, which grew at 19.3 per cent in Q1 FY26 -- partly offset by a moderation in agriculture (6.8 per cent), industry (5.5 per cent), and services (9.6 per cent).
The credit offtake of public sector banks (PSBs) has continued to outpace private sector banks (PVBs) since the last three quarters, as PSBs had greater headroom for lending with stable credit-to-deposit (CD) ratios as compared to PVBs, the report stated.
The northeastern region, with an annual growth of 13.7 per cent, outperformed other regions. Meanwhile, the rural segment grew the fastest among all the regions at 12.8 per cent.
Meanwhile, in June, credit outstanding rose to Rs 33.1 lakh crore in the 7-8 per cent interest rate bracket, increasing from Rs 20 lakh crore in the same month a year ago.
Lower rate brackets (less than 6 per cent) saw a rise to Rs 18.3 lakh crore from Rs 5.3 lakh crore, while high-yield segments ( more than 11 per cent) declined to Rs 27 lakh crore from Rs 30.3 lakh crore, indicating that banks are increasingly favouring mid-yield loans while reducing their exposure to high-interest lending.
According to the report, deposits witnessed a faster growth compared to credit, with a YoY growth at 10.9 per cent, driven by stronger mobilisation efforts by private banks and competitive deposit rates on select products. In absolute terms, deposits expanded by Rs 22.6 lakh crore from June 2025.
The Credit to Deposit (CD) ratio declined by 78 bps by the end of June 2025 and reached 79.6 per cent compared to 80.4 per cent over a year ago, with the deposit growth rate outpacing that of credit offtake.
Furthermore, the gap between the two has narrowed compared to the previous year, supported by improved liquidity conditions following the RBI's rate cuts, the report mentioned.
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