23
Nov
- Credit Growth Slowing
- Indian bank loan growth slowed to 12% YoY in FY25, down from ~16% earlier. The Economic Times+2Reuters+2
- In February 2025, personal loans and credit card loans saw especially weak growth. Reuters
- For FY26, credit growth forecasts vary:
- ICRA expects a moderation to 10.4–11.3%. mint
- India Ratings is more optimistic, seeing ~13–13.5% credit growth. Business Standard
- CRISIL also predicts credit growth of 12–13%, helped by regulatory support and softer rates. Business Standard
- Shift in Loan Composition
- Unsecured lending is cooling: growth in personal loans is slowing. ETBFSI.com+1
- Meanwhile, secured lending (like home loans, gold loans, LAP – loans against property) is doing quite well. ETBFSI.com+1
- Gold loans have surged massively — up ~76.9% YoY. ETBFSI.com
- Housing loan (home) growth has slowed: housing loans grew ~11%. ETBFSI.com+1
- Corporate / Industrial Loan Demand Weak
- Corporate loan growth is slowing: in Q1 FY26 (Apr–Jun 2025), lending to industries grew at its slowest rate in over 3 years, according to banks. The Indian Express
- Many companies are delaying big investments or preferring cheaper debt in the bond market rather than bank loans. The Indian Express
- Tightening on NBFC Loans
- Bank lending to NBFCs is slowing sharply: outstanding loans to NBFCs fell in some reports. The Times of India
- This is possibly due to risk concerns or regulatory caution.
- FinTech Lending Still Growing Strong
- FinTech NBFCs made record personal loan sanctions in FY 2024-25: ~10.9 crore loans, amounting to ₹1,06,548 crore. The Economic Times
- This shows that digital lending continues to deepen reach, especially among consumers who may not have had access to formal credit before.
- Interest Rate on Personal Loans (Current)
- Policy / Regulation — Prepayment Penalty
- There is a major change expected from Jan 2026: RBI directions indicate that banks and NBFCs will not be allowed to charge prepayment (foreclosure) penalties on loans. (As per some reports / analysis)
- This is good news for borrowers who want flexibility to repay loans early without extra costs.
- Cheaper Loans Coming for Borrowers
- Canara Bank has cut its MCLR (Marginal Cost of Funds – Lending Rate) by 5 basis points across tenures (effective Nov 12, 2025), which should lower EMIs for floating-rate home, auto, and personal loans. The Economic Times
- Tata Capital has reduced its personal loan rate to 11.50% p.a., making it cheaper for salaried / self-employed borrowers. Indiatimes
Key Take-Aways / Implications
- While overall loan growth is slowing, especially in unsecured segments (personal, credit card), secured loans are doing well — so borrowers are leaning more into collateralized credit.
- The fintech credit ecosystem remains very vibrant, helping expand access.
- Regulatory changes (like removal of prepayment penalty) are beneficial for borrowers.
- For someone taking a new loan (especially a home or personal loan), now could be a good time if you can lock in a reasonably low rate — and the flexibility to prepay later is improving.
If you like, I can pull up a real-time dashboard (from the last 1–2 months) of major loan trends in India (loan disbursals, defaults, RBI trends, etc.). Do you want me to do that?