Easing Monetary Policy Spurs Growth in Personal Loans and Deposits

RBI data reveals a decline in industrial credit growth to 7.6% in June 2025 amid robust growth in personal loans and term deposits, driven by easing policy rates. Public sector banks led in credit growth, while senior citizens held 20.4% of deposits by June 2025.

The Reserve Bank of India's latest data highlights a significant trend in the financial sector, as bank credit growth to industries fell to 7.6% in June 2025 from 11.3% the previous year. In contrast, personal loans continued to outpace overall advances, reflecting changing borrowing patterns.

Easing of policy rates led to a rise in the share of loans with interest rates below 9% to 54.1% in June 2025, up from 43.2% a year earlier. Public sector banks recorded higher credit growth compared to private and foreign banks, bolstering their position at 53.7% of total credit.

The data further reveals a robust 13.5% growth in term deposits, notably outpacing savings deposits. Senior citizens held 20.4% of total deposits by June 2025, with top states like Maharashtra and NCT of Delhi contributing significantly to the deposit inflow.