Business · Economy · 2 hrs ago
Icra expects India's credit growth to slow to 15-16% in FY27
Icra expects India's credit growth to slow in the second half of FY27 and remain subdued into the following fiscal year.
It projects growth of 15-16% for the full year FY27, down from the current 18-19%.
Higher policy rates are expected to weigh on consumption and borrowing demand.
A higher base of comparison may also make growth look slower.
As lending expands, banks' asset quality may deteriorate slightly, while their net interest margins are expected to improve as the Reserve Bank of India raises rates.
Icra estimates fresh loan slippages at public sector banks will rise to about ₹1 lakh crore in FY27, from ₹0.9 lakh crore in FY26; for private banks, it estimates ₹1.3 lakh crore.
Icra gave no specific credit growth estimate for FY28.
Icra expects India's credit growth to ease to 15-16% in FY27, from the current 18-19%.
The rating agency expects growth to moderate in the second half of FY27 and remain subdued into the next fiscal year.
Icra said hardening policy rates could weigh on consumption demand, while a higher base could make growth appear lower.
The agency expects banks' asset quality to deteriorate marginally as credit expands.
It also expects net interest margins to improve as the Reserve Bank of India's rate-hiking cycle progresses.
- Who
- Icra, a rating agency, issued the credit-growth forecast.
- What
- Icra expects credit growth to ease to 15-16% for FY27, from 18-19% currently.
- When
- The forecast is for FY27; the article was published on 2026-10-28.
- Where
- India.
- Why
- Icra cited hardening policy rates weighing on consumption demand and a higher base making growth appear lower.
This story does not have two clearly opposing sides.
Fresh slippages for public sector banks are estimated at ₹0.9 lakh crore.
Icra's forecast of 15-16% credit growth for FY27 was reported.
Icra expects credit growth of 15-16% for the full year and fresh public-sector-bank slippages of about ₹1 lakh crore.
- FY27 credit growth forecast
- 15-16%
- Current credit growth
- 18-19%
- Public-sector-bank fresh slippages, FY27
- About ₹1 lakh crore
- Public-sector-bank fresh slippages, FY26
- ₹0.9 lakh crore
- Private-bank fresh slippages, FY27
- ₹1.3 lakh crore