Bank credit growth accelerates in August; industry, services lead pickup

A broad-based revival in lending to industry, services and agriculture is strengthening bank credit growth, even as the extraordinary surge in gold loans seen over the past year continues to moderate. Credit to industry grew 18.2 per cent year-on-year (y-o-y) in August 2026, compared with 7 per cent a year earlier, while overall bank credit grew 19.1 per cent. Gold-loan growth, meanwhile, moderated to 83.2 per cent from 130.2 per cent a year earlier. The trend had already begun in July, when industrial credit grew 20 per cent and gold-loan growth moderated to 88.1 per cent, from 136.4 per cent a year earlier. "Credit to industry recorded a y-o-y growth of 18.2 per cent (7.0 per cent in the corresponding fortnight of last year). While credit to 'large' and 'medium' industries grew at an accelerated pace, 'micro and small' industries sustained steady expansion." Industry lending broadens The acceleration in industrial credit was spread across several major segments. The RBI said credit to infrastructure, all engineering, basic metal and metal products, chemicals and chemical products, food processing, textiles, construction, and petroleum, coal products and nuclear fuels recorded buoyant growth. The pickup was also broad-based across industry categories, with large and medium industries accelerating while micro and small industries continued to expand steadily. Services emerge as fastest-growing major sector Credit to the services sector grew 24.3 per cent in August, compared with 10.3 per cent a year earlier, making it the fastest-growing among the major sectors. The RBI said the expansion was supported by robust growth in non-banking financial companies (NBFCs), trade, professional services and commercial real estate. The strong rise in services credit, alongside the acceleration in industrial lending, indicates that the August expansion in bank credit was not concentrated in a single segment. Retail credit remains strong, but gold loans cool Personal loan credit grew 16.9 per cent y-o-y in August, up from 11.9 per cent a year earlier. Housing and vehicle loans continued to record double-digit growth. Gold loans, however, showed a clear moderation in growth. Loans against gold jewellery grew 83.2 per cent in August, down from 130.2 per cent a year earlier. The slowdown follows the moderation seen in July, when gold-loan growth stood at 88.1 per cent compared with 136.4 per cent a year earlier. "While segments such as 'housing' and 'vehicle loans' sustained double-digit growth, 'credit card outstanding' and 'loans against gold jewellery' decelerated." Thus, while gold loans continued to expand at a high rate, their contribution to the pace of retail-credit growth was becoming less pronounced. Agriculture credit accelerates Credit to agriculture and allied activities grew 17.2 per cent in August, compared with 7.6 per cent a year earlier. The stronger agricultural credit growth adds another leg to the broad-based expansion in bank lending. Taken together, the August data show faster credit growth across industry, services and agriculture, even as the exceptionally rapid expansion in gold loans continued to moderate.