RBI survey shows optimism in bank lending; loan demand set to rise across sectors

New Delhi [India], October 3 (ANI): The Reserve Bank of India (RBI) has released the results of the 33rd round of its quarterly Bank Lending Survey (BLS) of scheduled commercial banks on credit demand and lending conditions. The survey, conducted for the second quarter of 2025-26, reveals a continued optimism among bankers about rising loan demand across key sectors of the economy.
The survey conducted during Q2 FY26, reflects loan assessments for the current quarter and expectations for the upcoming quarters Q3 and Q4 FY26, and Q1 FY27.
The survey findings indicate that bankers have observed an improvement in loan demand during the second quarter across major sectors including agriculture, manufacturing, infrastructure and services sectors.
"Bankers remained optimistic about overall loan demand in Q3:2025-26, driven by higher loan demand expected from agriculture, mining & quarrying, manufacturing, infrastructure, and services sectors," noted the survey
The net response for overall loan demand stood at 38.9 per cent in Q2FY26, higher than 37.5 per cent in the previous quarter.
Agriculture loan demand improved significantly to 39.7 per cent, while manufacturing rose to 37.5 per cent. The services sector also saw robust optimism at 35.2 per cent. Retail or personal loan demand stood at 37.5 per cent.
Looking ahead, bankers remain upbeat about the credit environment. For the third quarter of FY26, the survey projects further improvement in loan demand across all sectors, with overall expectations rising to 42.6 per cent. Sectors like agriculture (44.8 per cent), manufacturing (44.6 per cent), and infrastructure (34.5 per cent ) are expected to be key drivers of this growth.
The optimism continues to Q4 FY26 and Q1 FY27, with bankers projecting sustained demand across sectors. The survey notes net responses of 44.6 per cent for both quarters, reflecting strong sentiment in credit growth.
In addition to rising loan demand, the survey also finds that most bankers foresee lending terms and conditions to remain favourable. During Q2FY26, the majority of respondents indicated no change in loan terms, while a positive net response of 9.3 per cent suggests slight easing.
Going forward the lenders expect further easing with the net response rising to 18.5 per cent in Q3 FY26. The agriculture, manufacturing, services, and retail sectors are expected to benefit from these accommodative terms.
For the extended outlook, easy lending conditions are projected to persist, with net responses of 20.4 per cent for Q4 FY26 and 24.1 per cent for Q1FY27.
The 33rd round of the BLS covered 30 major scheduled commercial banks, representing over 90 per cent of total credit in India. (ANI)