India Inc is returning to banks for money, but retail borrowers aren’t keeping pace
- Posted on July 20, 2026
- By Business News Today
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- 1 min read
In brief
India's banking sector is experiencing a significant structural shift in credit dynamics. While corporate and small-to-medium enterprises are aggressively borrowing to fund operations and refinance existing debt, individual consumers are pulling back from credit markets. This divergence presents challenges for profitability, as banks grapple with compressed margins amid weaker deposit ratios and an increasingly skewed lending portfolio toward institutional clients.
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India Inc is returning to banks for money, but retail borrowers aren’t keeping pace
Indias largest private banks are witnessing a shift in credit demand, with corporate and SME lending driving loan growth while retail borrowing remains subdued. Stronger working capital demand, refinancing and business banking boosted advances, but slower consumer credit growth and weaker CASA ratios continue to weigh on banks funding mix and margins.
