Banks Expect Loan Demand Surge Due to GST Rate Cut, Boost in Consumption

WITH credit growth remaining anemic so far this fiscal, printing in at 9.5%, down from 15% in the year-ago period, banks are now hoping to ride on the likely consumption boom being spawned by the GST cuts announced this Wednesday.

- BENN KOCHUVEEDAN @ Mumbai

It is not only corporate credit that has been slowed down, at 5.5%, down from 7.7% a year ago; the consumption loans have also tapered off and printed in at only 14.5% year-on-year to ₹105.6 lakh crore in Q1FY26. This is led primarily by gold loans, which surged 34.6%, followed by two-wheeler and auto loans, while home loans have slowed to under 10% and its agri and small business loans that are holding up.