Non-banking financial companies (NBFCs) emerged as the largest recipients of incremental bank credit in FY26, with their share doubling to 14.8% of total credit growth. According to sectoral data reported by The Times of India, loans to NBFCs rose by ₹4.3 lakh crore, significantly contributing to the overall credit expansion. Within the services segment, NBFCs accounted for the highest share of incremental lending, demonstrating their growing importance in the financial ecosystem. Recent developments show that ₹14,000 crore of loans were acquired through assignment, with majority in AA and AAA rated NBFCs, though tangible security coverage is relatively low at 12-13%. The strong performance of NBFCs is further evidenced by companies like Bajaj Finance, which reported a 22% rise in Q4 profit to ₹54.65 billion, supported by lower loan-loss provisions and steady lending expansion.
Bank credit growth in FY26 was primarily driven by services and retail segments, with non-food credit expanding by ₹29.2 lakh crore. As reported by The Times of India, services and personal loans together accounted for over two-thirds of incremental credit, with services contributing ₹9.7 lakh crore (33.1% of total growth) and personal loans adding ₹9.7 lakh crore (33.2% of total growth). The services segment saw the highest absolute addition, while personal loans recorded 16.2% growth, indicating stronger momentum in these segments relative to others. Recent performance data shows strong retail expansion with home loans growing 29%, vehicle loans at 56%, and gold loans at 53% year-on-year growth. This retail-focused growth trend is supported by companies like Bajaj Finance, which reported 22% year-on-year growth in assets under management, driven by sustained demand in retail lending.
Retail lending growth was led by housing and gold loans, with housing loans increasing by ₹3.5 lakh crore (11.8% of total credit expansion) and loans against gold jewellery rising by ₹2.5 lakh crore (8.7% of total growth). According to the data reported by The Times of India, part of the increase in gold loans reflects a reclassification of certain agricultural loans into the retail segment. Computer software grew 39%, while wholesale trade expanded 20.1%, showing varied performance across different retail categories. Recent developments show significant focus on gold lending with ₹24,000 crore gold loan book growing 53% year-on-year, supported by co-lending arrangements with 9 leading NBFCs. The strong performance in gold lending aligns with broader retail trends, as companies continue to see healthy customer activity and steady credit uptake.
Industry credit rose by approximately ₹6 lakh crore, contributing 20.4% of the total increase, while agriculture and allied activities saw an addition of ₹3.6 lakh crore, accounting for 12.3% of the total expansion. As reported by The Times of India, housing finance companies within the NBFC segment accounted for ₹50,157 crore, representing 1.7% of incremental credit. The data reveals a clear shift toward retail and services-oriented lending, with traditional sectors like agriculture and industry showing more modest growth rates. Recent performance shows MSME growing 11% and agriculture at 13%, though the bank deliberately slowed growth earlier in the year to improve portfolio quality. Despite challenges in certain segments, companies like Bajaj Finance have maintained operational resilience through disciplined credit underwriting and controlled growth strategies.
