Rate hikes are coming, but don’t count credit growth out just yet
Mint 1 hr ago·5 Oct 2026, 3:30 am
The Reserve Bank of India is expected to raise interest rates soon to combat inflation. This tightening cycle typically slows down bank lending and can hurt credit growth. However, the current economic outlook suggests a different story. Strong domestic growth and abundant liquidity in the banking system are providing a buffer against the impact of higher rates.
For investors, this signals that the credit upcycle may not be over despite the monetary tightening. Banks are likely to maintain healthy loan growth as long as the underlying demand remains strong. This resilience is a key factor to watch when assessing the sector's performance in the coming quarters.
Key takeaways
- Category: Economy.
- Flagged as a high-impact, market-moving story.
Why it matters
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