India: Corporate lending and personal loans dominate bank credit growth in Q1

India's banking sector saw robust credit growth in the first quarter of fiscal year 2027, driven significantly by corporate lending and personal loans. Together, these two segments accounted for approximately 63% of the incremental bank credit growth during the April-June period, according to an SBI Research report.

Within corporate borrowing, the petroleum, coal products, and nuclear fuels sector received the largest share of incremental credit, followed by engineering, infrastructure, and chemicals. These four sectors collectively absorbed about half of the new corporate credit disbursed. Other industries like food processing, basic metals, transport equipment, construction, and electronics also experienced notable increases in bank lending.

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The sectoral incremental credit growth data during Apr-June, 2026 indicates that 'industry and personal loans' has contributed ~63% of the incremental credit growth.

On the retail front, personal loans saw substantial growth, with loans against gold jewelry emerging as the primary driver. This category alone contributed 42% of the total personal loan growth, amounting to Rs 742 billion out of Rs 1,738 billion. Overall, gross bank credit increased by Rs 5.67 lakh crore during the quarter. The sustained demand from both businesses and households underscores the principal role of business investment and retail borrowing in driving bank lending growth.

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Among personal loans, 42% (Rs 742 bn out of Rs 1,738 bn) is contributed by 'loans against gold jewellery' alone.