Bank credit grows by 12.2% on year in Dec-25, Credit growth in PSBs consistently outpaces that of private sector banks
The Reserve Bank of India (RBI) stated in a latest update that Scheduled Commercial Banks’ credit growth (y-o-y) improved marginally to 12.2 per cent in December 2025 from 11.8 per cent in December 2024. Bank branches located in rural, semi-urban and urban centres recorded higher credit growth than metropolitan branches, with their combined share in total credit increased to 40.4 per cent in December 2025 from 36.9 per cent in December 2020. Since December 2024, credit growth in metropolitan branches has remained lower than branches in other population groups.
RBI stated that Public sector banks (PSBs) recorded credit growth of 14.1 per cent (y-o-y) for December 2025, exceeding the overall bank credit growth. Credit growth in PSBs has consistently outpaced that of private sector banks (PVBs) in last five quarters. The weighted average lending rate (WALR) on outstanding credit continued to ease across major sectors since December 2024 and stood at 9.35 per cent as on December 2025 (10.19 per cent on December 2024), in which the WALR on personal loans softened the most, followed by industry.
Following the easing of policy rates, the share of loans bearing interest rate ‘below 9 per cent’ increased from 42.2 per cent in December 2024 to 62.4 per cent on December 2025, reflecting a shift in the interest rate distribution of bank credit. Credit growth accelerated in agriculture, industry and trade sectors for December 2025 relative to December 2024. In contrast, transport operators, personal loans and professional services sectors recorded a moderation in credit growth during the same period.
Personal loans’ growth decelerated to 12.1 per cent for December 2025 from 13.7 per cent in December 2024, converging with overall bank credit growth after a sustained period of outpacing it. Credit to private corporate sector improved to 9.6 per cent (y-o-y) in December 2025 from 9.0 per cent in September 2025 and 7.9 per cent in June 2025.
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