Key Details
The 22nd FICCI–Indian Banks’ Association (IBA) Bankers’ Survey captures the July–December 2026 outlook of 22 public, private and foreign banks that together hold more than three-fourths of India’s banking assets. Its figures describe banks’ expectations and priorities, not credit growth already achieved.
Overall lending: Nearly three-fourths of respondents expect mid-teen or higher year-on-year growth in non-food credit; almost all expect at least double-digit growth.
Leading borrowers: More than four-fifths expect retail and small and medium enterprise (SME) loans to grow at a robust double-digit pace.
Business credit: Infrastructure leads expected demand for industrial term loans. Among services, banks anticipate term-loan demand from non-banking financial companies (NBFCs), tourism and hospitality, and commercial real estate.
Funding constraint: About two-thirds identify deposit growth lagging credit demand as the biggest obstacle to sustaining lending.
Private investment: Around three-fifths cite geopolitical risks and supply-chain disruptions as the main impediment to a broad-based revival in private capital expenditure.
Management priorities: Deposit mobilisation ranks first for FY2027, followed by AI and data-driven banking, then cybersecurity and operational resilience.
Retail and SME Demand Leads an Optimistic Lending Outlook
Banks expect credit demand to remain strong across households, smaller businesses, industry and services. Retail and SME lending stand out for the breadth of optimism among respondents, while the expected industrial term-loan demand — led by infrastructure — points to financing needs beyond short-term business operations.
The outlook differs by bank type. Private banks are the most optimistic about mid-teen or higher non-food credit growth; foreign-bank respondents expect a more moderate double-digit pace. These are survey expectations, not a projection of what the banking system will ultimately lend.
Funding, Not Just Borrower Demand, Will Shape Growth
The survey’s defining tension is that banks see customers seeking loans while many worry about attracting deposits quickly enough to fund them. Deposit mobilisation is consequently their leading management priority for FY2027. That concern is especially prominent among public-sector bank respondents.
Banks also distinguish a healthy lending outlook from a full revival in private investment. Respondents most often identify geopolitical and supply-chain uncertainty as the barrier to a broader capital-expenditure cycle, suggesting that available credit alone may not prompt firms to commit to new projects.
Banks Are Balancing Growth with Technology and Resilience
Alongside funding, respondents place substantial management attention on AI-led transformation and cybersecurity. Public-sector banks rank AI and data-driven banking first, while private banks place the greatest emphasis on deposits. The differences show that banks face distinct operational priorities even as they share an optimistic view of lending demand.
Policy Relevance
The survey offers policymakers an early view of where banks expect credit demand to emerge, particularly among SMEs and infrastructure borrowers. Its value is in identifying the conditions that could support or restrain lending, rather than establishing that the expected growth has occurred.
If deposits continue to grow more slowly than credit demand, banks will need to manage the cost and stability of funding as they expand loans. Whether anticipated industrial demand becomes sustained private investment will also depend on firms’ confidence amid external uncertainty. Subsequent credit, deposit and investment data will show how much of the survey’s optimism materialises.
Follow the Full Update Here: FICCI–IBA Bankers’ Survey: Banking Sector Outlook for July–December 2026