Credit Crunch Eases, But Recovery Looms: RBI Survey
The Reserve Bank of India’s latest Bank Lending Survey (BLS) reveals a seasonal dip in loan demand across key sectors during the first quarter of fiscal year 2026. This slowdown, however, is anticipated to be temporary.
Bankers surveyed by the RBI remain optimistic about a robust revival in credit demand in the coming quarters. The survey highlights a cautious approach by borrowers in the initial months of the fiscal year.
This seasonal moderation is attributed to various factors, including the usual post-festive slowdown and a degree of uncertainty in the global economic climate. However, the underlying strength of the Indian economy is expected to drive future borrowing.
The RBI’s findings offer a mixed signal for the Indian economy. While the current slowdown is expected, sustained recovery is crucial for maintaining economic momentum. The upcoming quarters will be pivotal in determining the effectiveness of government policies and the overall health of the credit market. The impact on job creation and infrastructure projects warrants close monitoring.
