Bank Credit Growth Slows in May 2025 Compared to Last Year: RBI Data

The Reserve Bank of India has released data on how banks have distributed loans across different sectors for the month of May 2025. This data is based on reports from 41 major scheduled commercial banks, which together account for about 95% of all non-food loans given by banks in India.

Overall Growth of Bank Loans

As of May 30, 2025, non-food bank credit (which means loans given to sectors other than agriculture-related food procurement) grew by 9.8% compared to the same time last year.
However, this is lower than the 16.2% growth seen in May 2024, indicating a slowdown in overall credit growth.

Credit Breakdown by Sector

1. Agriculture and Allied Activities

• Loans to the agriculture sector grew by 7.5% year-on-year.
• This is a big drop compared to the 21.6% growth seen in the same period last year.

2. Industry Sector

• Credit to industries increased by 4.9%, down from 8.9% last year.
• However, some industries showed faster growth in loans, including:
  • All engineering
  • Construction
  • Rubber, plastic, and their products

3. Services Sector

• Loans to the services sector grew by 9.4%, which is much slower than 20.7% growth in May 2024.
• This slowdown was mainly due to reduced lending to non-banking financial companies (NBFCs).
• On the other hand, loans to the computer software sector remained strong.

4. Personal Loans

• Personal loan growth slowed to 13.7%, compared to 19.3% last year.
• The decline was mainly due to slower growth in:
  • Other personal loans
  • Vehicle loans
  • Credit card outstanding

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