Bank credit growth set to cool below 12 percent as West Asia war reshapes lending

Published on 24 April 2026

Small firms and unsecured loans face higher default risk

Indian bank credit growth is expected to ease to below 12 percent in the coming fiscal year as the West Asia conflict and shifting interest rate dynamics weigh on borrowing and repayment capacity. Icra cautions that small businesses and unsecured loan segments could see more defaults, prompting banks to tighten underwriting for vulnerable sectors.

Icra projects Indian bank credit growth easing to under 12% in FY27
West Asia conflict and evolving interest rates are key drivers
Small businesses and unsecured loans could face higher defaults
Banks likely to become more cautious with at-risk lending

#credit growth #interest rates #west asia war #banking #defaults

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Bank credit growth set to cool below 12 percent as West Asia war reshapes lending

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