Bank credit to industry has shown accelerated growth momentum, expanding at 9.6% year-on-year in November 2025, marking a significant improvement from the 8.3% growth recorded in the same month of the previous year, according to latest Reserve Bank of India data.

Overall Credit Growth Performance

Non-food bank credit demonstrated robust expansion across the banking system during the reporting period. The comprehensive credit growth metrics highlight the strengthening credit demand in the economy.

Industry Sector Highlights

The industrial credit segment showed particularly encouraging trends, with micro, small and medium enterprises continuing to exhibit double-digit expansion rates. This sustained growth in the MSME sector indicates healthy business confidence and investment activity across smaller enterprises.

Among major industries, several sectors registered buoyant year-on-year growth performance:

• Infrastructure sector credit expansion
• All engineering industries showing strong demand
• Textiles sector maintaining growth momentum
• Petroleum, coal products and nuclear fuels demonstrating robust credit uptake

Services and Agriculture Sector Performance

The services sector maintained strong credit growth at 11.7% year-on-year, though slightly lower than the 12.8% recorded in the corresponding fortnight of the previous year. Within services, non-banking financial companies and computer software segments showed improved growth rates, while trade and commercial real estate registered healthy expansion despite marginal deceleration.

Agriculture and allied activities credit growth moderated to 8.7% compared to 15.3% in the previous year's corresponding period, reflecting a normalization from the exceptionally high growth rates seen earlier.

Personal Loans Segment Analysis

The personal loans segment recorded steady growth at 12.8% year-on-year, marginally down from 13.4% in the previous year. The segment showed mixed performance across different categories:

Sustained Growth Areas:

• Vehicle loans maintaining steady expansion
• Loans against gold jewellery showing consistent demand

Moderated Segments:

• Housing loans experiencing slower growth
• Credit card outstanding witnessing deceleration

Data Coverage and Methodology

The sectoral deployment data for November 2025 was compiled from 41 select scheduled commercial banks, representing approximately 95% of total non-food credit disbursed by all scheduled commercial banks. This comprehensive coverage ensures the data accurately reflects the overall banking sector's credit deployment patterns and growth trends across various economic segments.

The Reserve Bank of India has issued comprehensive amendment directions revising the risk-weighting framework for non-banking financial companies' exposure to infrastructure projects. The changes, which will take effect from April 1, 2026, aim to align capital requirements more closely with the underlying risk profile of operational projects and promote more accurate risk assessment in infrastructure financing.

The central bank developed these modifications after examining stakeholder feedback received on draft amendment directions issued on October 24, 2025. The RBI incorporated resulting modifications into the final directions, notifying both the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Amendment Directions, 2026 and the Reserve Bank of India (Non-Banking Financial Companies – Concentration Risk Management) Amendment Directions, 2026.

Revised Risk Weight Structure

Under the new capital adequacy norms, loans extended by NBFCs to "high-quality infrastructure projects" will attract significantly lower risk weights, subject to specified conditions. The framework establishes a tiered structure based on debt repayment milestones:

The RBI clarified that repayment thresholds will be assessed based on total sanctioned project debt, including any additional debt sanctioned through loan takeovers. If projects initially classified as high-quality infrastructure projects subsequently fail to meet prescribed conditions, the exposures will revert to higher risk weights applicable under the existing infrastructure lending framework.

Qualification Criteria for High-Quality Projects

To qualify for preferential risk weights, infrastructure projects must meet stringent operational and financial criteria. Projects must have completed at least one year of operations after achieving commercial operations without breaching material lender covenants, and the exposure must be classified as 'standard' in the lender's books.

The framework requires that project revenues depend on concession or contractual rights granted by the Centre, state governments, public sector entities, or statutory bodies. These arrangements must include provisions protecting rights throughout the concession period, ensuring revenue stability and predictability.

Enhanced Contractual Safeguards

Lenders must benefit from comprehensive contractual protections to qualify for lower risk weights. Key safeguards include:

• Escrow or trust and retention account mechanisms to ring-fence cash flows
• Pari-passu charge over project assets
• Risk-mitigation features such as step-in rights or minimum termination payments
• Adequate financial arrangements for working capital and funding requirements
• Restrictions preventing borrowers from taking detrimental actions without lender consent

These protections ensure lenders maintain control over critical project elements while safeguarding their financial interests throughout the project lifecycle.

Implementation Timeline and Transition Provisions

The amendment directions will become effective from April 1, 2026, though NBFCs may adopt them earlier if implemented in full. The RBI has provided transition arrangements for existing exposures that currently attract lower risk weights but will be subject to higher weights under the revised norms.

For such exposures, NBFCs may continue applying existing risk weights until the next review or renewal, or March 31, 2027, whichever occurs earlier. This transition period allows financial institutions to adjust their portfolios and capital planning strategies without immediate disruption.

The RBI stated that these amendments aim to promote improved capital allocation and greater financial stability in infrastructure financing by NBFCs, reflecting a more nuanced approach to risk assessment in this critical sector.