NBFCs became the largest driver of incremental bank credit in the first half of FY27, as banks increased advances to non-bank lenders by Rs 1.8 lakh crore between March 31 and September 30, compared with Rs 1.4 lakh crore lent to home buyers.
The shift came as scheduled commercial banks’ outstanding non-food credit rose 19.1% year on year to Rs 229 lakh crore at the end of September. Credit expanded 7.5% during the six months from March, adding Rs 16.1 lakh crore across major sectors.
Services absorbed the largest share of incremental lending at Rs 4.9 lakh crore, followed by personal loans at Rs 4.5 lakh crore, industry at Rs 3.7 lakh crore and agriculture and allied activities at Rs 1.8 lakh crore. Within services, lending to NBFCs grew 41.8% year on year to Rs 22.5 lakh crore.
The figures place NBFC funding at the centre of the banking system’s latest credit expansion. Services credit as a whole grew 28.3% to Rs 64.9 lakh crore and accounted for 30.6% of incremental non-food lending. Commercial real estate advances rose 23.3% to Rs 7.5 lakh crore, while trade credit increased 23.9%.
The data also shows continued expansion in industrial lending. Industrial credit grew 19.5% year on year to Rs 49.8 lakh crore. Advances to large industries rose 16% to Rs 33 lakh crore, while credit to medium enterprises increased 33.2% and lending to micro and small enterprises grew 24.4%. Of the Rs 3.7 lakh crore added in industrial credit during the six-month period, large companies accounted for Rs 2 lakh crore and MSMEs for Rs 1.6 lakh crore.
Housing remained part of a broader expansion in personal lending, although the composition of retail credit shifted towards secured advances. Personal loans grew 17.3% year on year to Rs 74.27 lakh crore. Advances against gold jewellery rose 82.6% to Rs 5.8 lakh crore, with banks adding Rs 1.2 lakh crore in gold loans between March and September.
Loans against fixed deposits, including FCNR(B) and NRNR deposits, also recorded rapid growth. Outstanding advances in this category rose 53.3% year on year to Rs 2.2 lakh crore and increased 28.1% during the first half of FY27. These loans contributed Rs 47,471 crore during the period, accounting for 10.6% of incremental personal loans and 3% of the banking system’s incremental non-food credit.
