Financial resources to India's commercial sector experienced an unprecedented surge in the first two months of FY27, reaching ₹2.82 lakh crore, according to the latest RBI data. This represents a dramatic eight-fold increase compared to the corresponding period in the previous year, marking a significant acceleration in commercial sector financing. The surge is primarily attributed to increased foreign direct investment and enhanced bank credit availability, reflecting strong investor confidence and improved lending conditions.
Bank credit growth demonstrated a notable improvement during this period, with non-food bank credit rising by ₹88,000 crore against a decline of ₹1.55 lakh crore in the previous year. As reported by The Hindu BusinessLine, this represents a complete reversal in credit trends, indicating strengthened lending activity and improved business confidence. The RBI bulletin noted that bank credit growth picked up further in May 2026, though policy rate transmission in the credit market moderated during March-April with some hardening in deposit and lending rates.
Foreign direct investment to India contributed significantly to the commercial sector's resource inflow, with the RBI's latest monthly bulletin highlighting this as a key driver. Non-bank sources of commercial sector resources also showed positive momentum, with flows increasing 2% to ₹1.94 lakh crore compared to ₹1.90 lakh crore in the previous year. This diversified funding approach has helped sustain the overall surge in commercial sector financing during the early months of FY27.
The commercial sector's enhanced access to financial resources reflects broader economic conditions and policy measures. According to the RBI bulletin published on June 22, 2026, the policy rate transmission in the credit market moderated during March-April, with some hardening in deposit and lending rates. This suggests that while credit availability improved, the cost of borrowing also increased, potentially affecting the overall impact on business financing costs and growth prospects for the commercial sector.
