Industrial Credit Growth Projected at 9-13% for Jan-June 2026: Ficci-IBA Survey

The Indian banking sector is poised to witness a 9-13% industrial credit growth in the January-June period of 2026, according to the Federation of Indian Chambers of Commerce and Industry-Indian Banks’ Association (Ficci-IBA) survey. While industrial credit is not expected to surge sharply, a steady and gradual expansion is anticipated, fueled by the ongoing revival in capital expenditure (capex), infrastructure development, and sectoral demand recovery.

Out of the different banks, small finance banks and cooperative banks are expected to see a relatively conservative credit growth of around 7-9%. This reflects a cautious approach, possibly due to limited exposure to large industrial borrowers and a stronger focus on retail and MSME lending. Public-sector banks, however, display stronger confidence, with credit growth projected to be around 11-13% or above 13%. This optimism is anchored by improved asset quality, strengthened capital buffers, and continued traction in corporate lending, particularly amid signs of capex revival.

The non-food credit of private banks shows a more diversified distribution of responses, with the majority concentrated in the 11-13% and above 13% growth bands. This indicates a selective but growth-oriented approach, supported by robust retail portfolios, MSME lending momentum, and calibrated corporate exposure strategies. For foreign banks, growth is expected to be in the 11-13% range, reflecting moderate optimism shaped by global liquidity conditions, capital allocation priorities, and selective participation in domestic corporate credit markets.

Segment-wise responses indicate clear variation in expectations across bank categories. Small finance banks and cooperative banks are largely clustered in the 7-9% growth range, reflecting relatively conservative outlooks on industrial credit expansion. This is possibly due to their limited exposure to large industrial borrowers and a stronger orientation toward retail and MSME lending.

Among the sectors, the survey responses indicate a strongly optimistic outlook for retail loan growth, with expectations heavily skewed toward high double-digit expansion. Agriculture and allied sector credit growth is expected to see around 9-13% growth in the January-June period of 2026. Infrastructure (including power, roads, and telecom) is expected to witness high growth in demand for term loans over the next six months, followed by metals, iron and steel, real estate, and construction. Auto and auto components, pharmaceuticals, textiles, and engineering goods also feature prominently among the top sectors anticipated to see increased borrowing activity. Other sectors such as chemicals (excluding pharma), leather and leather products, and rubber and plastics received comparatively fewer mentions.

The outlook for term loan demand in the next six months appears capex-heavy and infrastructure-led, with strong support from real estate and manufacturing-linked sectors. The responses reflect optimism around investment-led growth rather than consumption-driven sectors. The demand for working capital loans is expected to witness high growth from textiles in January-June 2026. This will be followed by demand from auto and auto components and pharmaceuticals, along with engineering goods and the food processing sector.

Commercial real estate is expected to see high growth in term loan demand over the next six months, receiving the maximum number of mentions. This is followed by non-banking financial companies (NBFCs) and tourism, hotels, and restaurants, which are tied as the next most cited sectors. Shipping and aviation also feature prominently among the leading sectors anticipated to witness increased borrowing activity.

The responses indicate that trade (wholesale & retail) is expected to witness high growth in working capital loan demand over the next six months. This is followed by transport operators and tourism, hotels, and restaurants, which also received strong mentions. NBFCs and professional services complete the top five services sectors anticipated to see increased demand for working capital financing.

The outlook suggests that term loan demand in services will be asset-heavy and expansion-driven, led by commercial real estate and financial intermediation (NBFCs), with continued recovery momentum in tourism and logistics-linked sectors. Asset-light service industries, by contrast, show limited near-term capex demand.