Bank Credit Growth Outpaces NBFCs In July 2026 As Outstanding Bank Credit Stands 3.7 Times Higher: BoB Report

New Delhi, Sep 10 (KNN) Outstanding bank credit was 3.7 times that of non-banking financial companies (NBFCs) in July 2026, with bank lending growing at a faster pace, according to a report by Bank of Baroda (BoB).

NBFCs accounted for 21.3 per cent of total credit across banks and non-bank lenders, marginally higher than 21.2 per cent in June, ANI reported.

Banks had a more diversified lending portfolio, with retail loans accounting for 32.5 per cent, followed by services at 28.1 per cent and industry at 21.7 per cent. NBFC lending was more concentrated in retail, which accounted for 43.5 per cent of their total credit, the report noted.

Banks Lead Industry, Services Lending

Within NBFC retail lending, housing loans accounted for 14.3 per cent and vehicle loans 10.5 per cent, compared with 3.5 per cent for vehicle loans in banks.

Industry accounted for 36.9 per cent of NBFC credit, led by infrastructure at 33.7 per cent and power at 24 per cent, highlighting the role of NBFCs in infrastructure financing.

Banks continued to dominate services lending. Outstanding bank credit to services, excluding lending to NBFCs, stood at Rs 40.7 lakh crore in July, compared with Rs 7.7 lakh crore for NBFCs. Bank services credit grew 22.9 per cent, against 15.2 per cent for NBFCs, according to the report.

In industry lending, banks regained momentum, with credit to infrastructure and power growing 10.2 per cent and 21.6 per cent, respectively, compared with 6.2 per cent and 6.9 per cent for NBFCs.

NBFCs Outpace Banks in Retail

NBFC retail credit grew 21.4 per cent, faster than banks, supported by consumer durable financing and wider market penetration. Housing demand remained strong across both lender categories.

Gold loans expanded sharply, with banks’ outstanding loans against gold jewellery reaching Rs 5.5 lakh crore, up 88.1 per cent, while NBFC gold loans stood at Rs 3.5 lakh crore, growing 68.5 per cent.

Commercial real estate credit also increased, reaching Rs 6.7 lakh crore for banks and Rs 1 lakh crore for NBFCs.

The report said the sharp build-up in certain credit segments, particularly gold loans, warrants continued monitoring.

(KNN Bureau)