Credit expansion likely at 10.8% in FY26

Mumbai: Measures taken by the Reserve Bank of India (RBI) to ease the monetary policy in recent months are expected to support a year-on-year credit expansion of around 10.8 per cent at Rs19 lakh crore to Rs20.5 lakh crore in 2025-2026, according to an ICRA report released on Tuesday.

Such measures include the Repo rate cut, deferment of proposed changes in the liquidity coverage ratio (LCR) framework and additional provisions on infra projects, along with the roll-back of increased risk weights on lending to unsecured consumer credit and non-banking financial companies (NBFCs).

Besides this, the durable liquidity infusion by the RBI through open market operations (OMO) by way of purchases of Government bonds and forex swaps with banks, would aid the liquidity and faster transmission of the ongoing cut in policy rates, the report states.