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Banks have raised their credit growth guidance for the current financial year on the back of GST rate cuts in late September, lower interest rates post 100 basis points (bps) repo cut, and the easing of banking regulations by the central bank, among other factors. The country’s largest lender State Bank of India (SBI) noted that the various “banking reforms” undertaken by the Reserve Bank of India (RBI) in the last monetary policy committee meeting are credit accretive. “At industry level, we must see 1 per cent additional credit growth (for FY26). We are also revising our credit growth guidance from 11 per cent to 12-14 per cent. There is robust growth across business segments in Q2...this is based on many enablers which the RBI has given and also the fiscal measures in terms of GST 2.0. We believe there will be sustained credit demand, which gives an opportunity to us particularly in RAM (retail, agriculture and MSME) segment...,”.said CS Setty, Chairman, SBI in an earnings call. SBI saw heavy demand for car and personal loans post the GST rate cuts in September, he said. According to Amitabh Chaudhry, MD, CEO, Axis Bank, while tariff-related developments presented headwinds in H1FY26, repo cut, favourable monsoon, lower GST and improving liquidity conditions will enable strong tailwinds in H2FY26. “These factors, combined with a series of progressive RBI policy interventions aimed at strengthening the financial ecosystem, set the stage for acceleration in credit growth,” Chaudhry said in an analyst call, adding that Axis will grow 3 per cent higher than industry. Umesh Revankar, vice-chairman at Shriram Finance, says following the implementation of GST 2.0, the NBFC saw higher credit demand in the last week of September, especially in two-wheeler and car segments. He said the NBFC has guided for 15 per cent loan growth in FY26, it could report higher growth of 17-18 per cent. Jairam Sridharan, MD, CEO at Piramal Finance, says while used cars are getting sold at a lower rate on account of GST reduction, the pickup in units sold is making up for the same. “Our AUM growth guidance for the fiscal is 25 per cent...Currently, we are not revising our guidance, but we are trending meaningfully above what we anticipated at the beginning of the year...,” he said. Published on November 9, 2025
