Banks supply 77 pc of new credit led by commercial real estate lending

New Delhi: Banks accounted for 77.1 per cent of overall incremental credit between March and July 2026 adding Rs 7.17 lakh crore, compared with Rs 2.13 lakh crore by non‑banking financial companies, underscoring banks’ dominant role in fresh lending, a report said on Wednesday.

The report from Bank of Baroda said banks now hold about 3.7 times the outstanding credit of NBFCs and are expanding credit at a much steeper pace.

The sector where bank lending has been the most aggressive is commercial real estate where the bank's share in incremental credit has been nearly 100 per cent.

The contribution in this sector is notable despite RBI raising risk weights on commercial real estate loans to regulate credit flow, indicating growing construction activity in the economy.

Bank gold-loan credit grew 88.1 per cent YoY in July 2026, compared to 68.5 per cent for NBFCs. Outstanding gold loans stood at Rs 5.5 lakh crore for banks and Rs 3.5 lakh crore for NBFCs.

In terms of incremental credit, banks are dominant across most sectors, with the notable exception of consumer durables where their share is the lowest at 6.3 per cent.

For vehicle loans and transport operators the bank share is just above 50 per cent.

In terms of share of lending, banks are maintaining a well-diversified portfolio with share of retail loans, services and industry capturing the space. For NBFCs, the share is skewed towards retail loans especially vehicle loan space and infrastructure space.

Retail loans account for 32.5 per cent of bank credit, followed by services (28.1 per cent) and industry (21.7 per cent).

Meanwhile, NBFC credit is more concentrated in retail loans (43.5 per cent) and industry (36.9 per cent), particularly infrastructure.

Banks are regaining ground in infrastructure, as their share in this sector grew 10.2 per cent YoY, compared with 6.2 per cent for NBFCs.

In the March–July 2026 period, banks accounted for 99.6 per cent of incremental infrastructure credit, signalling a notable recovery in a segment where NBFCs previously had a stronger presence.

Bank credit to services grew 22.9 per cent YoY, compared with 15.2 per cent for NBFCs. Banks also have a much larger outstanding services portfolio—Rs 40.7 lakh crore versus Rs 7.7 lakh crore for NBFCs.

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