Banks lift share in flow of resources to corp sector

MUMBAI: Scheduled commercial banks have regained market share in financing the commercial sector in FY26 up to Jan 31 by expanding non-food credit faster than the overall resource pool, reversing a contraction seen in FY25 amid a surge in equity issuances and non-bank funding.

Data for FY26 up to Jan 31, 2026 released in RBI’s bulletin shows that incremental flows by way of bank credit stood at Rs 21.8 lakh crore in the 10-month period as against Rs 14 lakh crore in the same period of 2024-25, a growth of 55.3%. Over the same span, the total flow of financial resources from all sources increased from Rs 25.5 lakh crore to Rs 34.5 lakh crore, a rise of 35%.

Because bank credit grew faster than the overall resource pool, banks lifted their share of total commercial sector funding to 63.2% during the period. In FY26 up to Jan 31, however, domestic non-bank sources slowed. Overall domestic non-bank funding grew 4.9%, from Rs 9.1 lakh crore in the comparable period of FY25 to Rs 9.6 lakh crore. Equity issuances contracted 12.3%, falling from Rs 3.4 lakh crore to nearly Rs three lakh crore for the period ended Jan 31. Corporate bond issuances were the only major domestic non-bank segment to outpace bank credit growth, rising from Rs 1.1 lakh crore to Rs 2.5 lakh crore. Foreign sources of funding remained firm.

Resource flows from abroad increased from Rs 2.4 lakh crore to Rs 3.1 lakh crore up to Jan 31. The recovery follows a year of retreat. In 2023-24, non-food bank credit stood at Rs 21.4 lakh crore. By the end of 2024-25, it had fallen to Rs 17.9 lakh crore. In the current fiscal, most banks have increased advances target after bank credit grew 14.6%, the highest in 19 months, for the fortnight ended Jan 31, 2026.