India's banking sector poised for double-digit credit growth despite macroeconomic challenges

New Delhi: India's banking sector is confident about sustaining double-digit credit growth despite increasing funding pressures and macroeconomic headwinds. Banking sector maintains a strongly constructive outlook on credit growth, underpinned by resilient demand across retail, SME (small and medium enterprises), industrial and services segments, said the latest FICCI-IBA Bankers' Survey. The banking sector continues to demonstrate resilience, supported by improved asset quality, stronger capital buffers, sustained retail and emerging signs of a broader revival in private-sector capital expenditure, it said.

Retail and SME lending emerge as the clearest drivers of credit growth. More than four-fifths of respondents expect both retail loans and SME credit to grow at a robust double-digit pace YoY (year-on-year), and almost all expect double-digit growth in SME credit, said the survey, jointly conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian Banks' Association (IBA).