The report attributes the moderation in growth to weaker momentum and unfavourable base effects. Excluding the merger impact of HDFC Ltd with HDFC Bank – which took effect on July 13, 2023 – the adjusted credit growth stood at 10.6 per cent as on 13 June 2025, compared to 15.5 per cent a year earlier
While public sector banks (PSBs) maintained relatively steady performance, private banks experienced a sharper decline. Representational pic
The credit growth of Scheduled Commercial Banks (SCBs) has slowed significantly to 9.6 per cent as of June 13, marking a sharp fall from 19.1 per cent recorded during the same period last year, according to a recent report by the State Bank of India (SBI), reported news agency ANI.
The report attributes the moderation in growth to weaker momentum and unfavourable base effects.
Excluding the merger impact of HDFC Ltd with HDFC Bank – which took effect on July 13, 2023 – the adjusted credit growth stood at 10.6 per cent as on 13 June 2025, compared to 15.5 per cent a year earlier, ANI reported.
"SCBs credit growth moderated to 9.6 per cent, as on 13 June 2025 (19.1 per cent a year ago)," the report stated.
According to SBI’s analysis, the total credit expanded by Rs 70,005 crore (0.4 per cent year-to-date) by mid-June 2025. This figure is considerably lower than the Rs 2.74 lakh crore (1.7 per cent YTD) recorded during the same period last year.
Following three consecutive years of robust credit expansion from FY21 to FY24, the growth momentum began to taper off from June 2024, ultimately settling at 11.1 per cent for FY25.
The report further noted a shift in credit growth patterns among bank groups.
While public sector banks (PSBs) maintained relatively steady performance, private banks experienced a sharper decline, reported ANI.
"The bank-group wise contribution to SCB growth indicates that private banks' growth slowed down significantly compared to PSBs," the report added.
PSBs recorded 12.2 per cent credit growth in FY25, slightly lower than the 13.6 per cent registered in FY24. In contrast, private sector banks saw their credit growth dip to 9.5 per cent in FY25, the lowest level since FY21.
The SBI report also highlighted a change in the sectoral composition of credit growth. The industry sector’s share in incremental credit rose to 17 per cent in FY25, up from 11 per cent in FY24.
A particularly encouraging trend was observed in the Micro, Small and Medium Enterprises (MSME) sector, which witnessed a 17.8 per cent year-on-year increase in credit. This surge was supported by improved balance sheets and lower delinquency rates.
The report stated that credit growth to MSMEs was bolstered by several factors, including formalisation through UDYAM registration number seeding, enhanced guarantee cover under government schemes, revised definitions of MSMEs, and lower turnover thresholds for mandatory registration on the TReDS platform.
(With ANI inputs)
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