Bank credit growth down sharply in FY25

Gap Narrows Further

- ABHIJIT LELE

After two years of high growth in the post-pandemic phase, the pace of bank credit expansion moderated sharply to 11 per cent year-on-year (Y-o-Y) in FY25 from 20.2 per cent in FY24.

The slowdown reflects higher base effect, regulatory actions like higher risk weights to signal stress in retail loans, and the challenge of raising deposits for extending loans, bankers and analysts said. Credit grew by 15 per cent in FY23 and 20.18 per cent in FY24.