NEW DELHI
India’s financial landscape is witnessing a massive boom as credit growth skyrocketed by 61% this fiscal year. A new report from Yes Bank reveals that total loans reached a staggering Rs 25.1 lakh crore, nearly matching the total amount of money people deposited in banks.
This surge is being powered by regular citizens and small business owners. For the first time in a decade, the “credit-to-deposit” ratio hit 82.4%, meaning banks are lending out a huge portion of the money they hold. While this shows a hungry economy, it is also putting a slight squeeze on the cash banks have available for immediate use.
Personal loans are the biggest stars of this story, now making up one-third of all bank lending. Interestingly, car loans have officially overtaken home loans as the top choice for borrowers in 2026. Experts believe tax relief and higher household incomes have given people the confidence to spend more on big purchases.
Small and medium businesses (MSMEs) are also seeing a major comeback. Thanks to government support and easier loan rules, these smaller companies now account for nearly one-third of all industrial credit. Micro-enterprises alone added over Rs 2 lakh crore in new loans this year.
However, the report warns of potential speed bumps ahead. Rising oil prices, more expensive food, and slower exports could make people more cautious in 2027. For now, though, India’s borrowing spree signals a nation that is racing toward growth with full pockets and big ambitions.