RBI officials noted that bank credit growth strengthened in key sectors in October, namely industrials, services and personal loans.
The total flow of funds to the commercial sector in the current fiscal year to date stood at ₹22,56,691 crore and was ₹4,21,989 crore higher than the previous year period.
Within this period, the flow of funds to the commercial sector of banks (non-food loans) was higher at ₹1,91,452 crore at ₹12,40,071 crore.
The flow of funds to the commercial sector from non-banking sources (domestic and foreign) stood at ₹10,16,620 crore and was even higher at ₹2,30,537 crore.
Non-banking sources – corporate bond issuance and foreign direct investment in India – have shown a marked increase so far this year, RBI officials said in an article titled ‘State of the Economy’.
Financing: Banks vs. Non-Bank Sources
In the financial year to date (to November 28, 2025), the share of non-food bank credits in the total flow of funds to the commercial sector has fallen to 55 percent (compared to 57 percent a year ago).
At the same time, the share of non-bank sources in the total flow of funds to the commercial sector increased from 43 percent to 45 percent.
As on November 28, total outstanding credit to the commercial sector increased by 13.2 percent (11.1 percent in the same period last year), with credit from non-food bank and non-bank sources registering growth of 11.4 percent (10.6 percent) and 17 percent (12.2 percent) respectively.
RBI officials noted that bank credit growth strengthened in key sectors in October, namely industrials, services and personal loans.
“The recovery in industrial credit growth was driven by robust growth in credit to micro, small and medium enterprises (MSMEs). Credit to services recorded strong double-digit growth, driven by a surge in bank lending to NBFCs. A revival in personal loan growth was driven by home and auto loans,” they said.
Gold loans are rising
The officials highlighted that loans for gold jewelry have surged and continued to record triple-digit growth rates since February 2025. The sharp increase can be attributed to a rise in the gold price. Despite the high growth rate, the share of gold loans in total non-food loans remains relatively low, albeit with an increase compared to last year.
The share of gold loans in total non-food credit was 1.8 percent in October 2025, compared to 0.9 percent in October 2024. The share of gold loans in personal loans was 5.2 percent in October 2025.
Published on December 22, 2025
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