India’s Bank Credit Growth Slows Sharply to 9.8% in May 2025: SBI Report
India’s banks are lending much less than before. The State Bank of India (SBI) reported that credit growth in May 2025 was just 9.8% year-on-year. This is a big drop from 19.5% in May 2024.
This slowdown shows that lending to key sectors like agriculture, industry, and services has reduced.
Bank Credit Shrinks in April–May 2025
In the first two months of the financial year (April–May 2025), bank credit actually shrunk by ₹15,676 crore. This means a negative year-to-date (YTD) growth of -0.1%.
In the same period last year (2024), credit had grown by ₹1.68 lakh crore, showing a YTD growth of 1.0%.
Slower Deposit Growth
Deposits are still growing, but at a slower pace:
- Deposits rose by ₹3.06 lakh crore (1.4% YTD) in April–May 2025.
- This is slower than ₹3.39 lakh crore (1.7% YTD) during the same period last year.
This shows that both credit and deposits are rising more slowly.
Sector-Wise Credit Growth
1. Agriculture and Allied Sectors
- Credit growth: 9.2% in April 2025 (down from 19.8% last year).
This drop could affect rural demand and farm production.
2. Industrial Sector
- Credit growth: 6.6% in April 2025 (slightly lower than 7.4% last year).
Some industries like metals, engineering, and construction saw small gains. But loans to infrastructure are still weak.
3. Services Sector
- Credit growth: 10.5% in April 2025 (down sharply from 22.0% last year).
Lending to NBFCs fell a lot, but sectors like trade and software services did okay.
Personal Loans Slow Down
Loans for personal use, like buying vehicles or using credit cards, also slowed:
- Growth dropped to 14.5% year-on-year, from 17.0% last year.
What It Means
The SBI report shows that the economy is cooling down. Lending and deposits are both slowing. Key sectors like agriculture, industry, and retail loans are feeling the impact.
To boost growth, the government and banks might need to take new steps.
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