Credit growth to moderate in H2, FY27: Icra
Economic Times 1 hr ago·28 Oct 2026, 12:34 am
Credit growth in India is expected to moderate in the second half of fiscal 2027, dropping to 15-16% from previous highs. This slowdown is largely driven by higher policy rates, which increase borrowing costs for businesses and individuals. As a result, banks may see a slight rise in fresh bad loans, with public sector banks potentially facing ₹1 lakh crore in new slippages and private banks around ₹1.3 lakh crore.
For investors, this shift signals a transition from rapid credit expansion to a more cautious lending environment. While higher rates could strain borrowers, they may also help banks maintain healthier net interest margins. The key for investors is to monitor how banks manage asset quality and whether their profitability remains resilient despite the softer credit growth outlook.
Excerpt from Economic Times
Credit growth is projected to ease to 15-16% for FY27, impacted by hardening policy rates. Fresh slippages for public sector banks are estimated to increase to ₹1 lakh crore in FY27. Private banks may experience fresh slippages amounting to ₹1.3 lakh crore. While banks' asset quality may deteriorate slightly, net…Read the original at Economic Times
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