Indian banks experienced a notable shift in credit dynamics during Q1 (ended June 30), with corporate loan growth surging and outpacing retail lending, reversing the trend seen over previous years. Corporate Credit Expansion: Corporate lending expanded strongly, with RBI data showing system-level credit to industry rising 19.2% YoY. Growth was driven by sector demand in power, renewables, and data centres, alongside excess liquidity buffering by companies amid geopolitical tensions. Retail Growth Moderation: Overall retail loan growth slowed to 11.7% YoY system-wide (7–12% across most major banks), primarily due to normalising demand in post-COVID housing loans, cautious auto lending over aggressive market pricing, and a slowdown in unsecured segments like personal loans and credit cards. Gold Loans as an Exception: Despite the broader retail deceleration, gold loans saw explosive growth—expanding by nearly 100% YoY—acting as the primary driver of retail growth for lenders such as Bank of Baroda and Indian Bank. Key Lenders and Outliers: $SBIN stood out as a retail outlier with 15% YoY growth, whereas Axis Bank recorded the strongest corporate loan growth at 38% YoY. Positive Outlook: Financial analysts expect corporate lending to remain robust due to strong corporate balance sheets and brownfield capex investments, while retail disbursements are anticipated to recover heading into the upcoming festive season.

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