India's Retail Credit Soars: Unleashing Growth Potential Through Digitalization

India's retail credit has seen a surge from 9% of GDP in 2013-14 to 18% in 2024-25, driven by private banks and digital innovations. Despite stable bank credit levels, retail credit presents immense growth opportunities with advancements in technology and a rising middle class, according to Motilal Oswal's report.

Retail credit in India has doubled to 18 percent of the GDP in 2024-25, marking a significant rise from 9 percent in 2013-14, as reported by Motilal Oswal. In comparison, bank credit to GDP has remained stable at 55 percent over the past decade, reflecting a shift in financial dynamics.

As banks rapidly expand their retail loan books, the sector shows huge untapped potential driven by private banking, digitalization, fintech platforms, and regulatory efforts for financial inclusion. The brokerage report highlights the significant expansion in consumer lending propelled by rising disposable incomes and technological advancements.

Despite notable gains, India's retail credit penetration lags behind global standards, foreshadowing substantial growth prospects, especially with an expanding middle class. Essential innovations, including AI-driven personalized banking and Central Bank Digital Currencies, are anticipated to define the next transformation phase for the financial sector.

In parallel, India's deposit accounts have more than doubled over the last decade, supported by initiatives like Jan Dhan Yojana. The program has extensively improved digital infrastructure and facilitated financial accessibility, reflecting increased banking penetration across the nation.

(With inputs from agencies.)