Thu Mar 27 18:34:30 UTC 2025: ## Indian Bank Loan Growth Slows for Eighth Straight Month

**Mumbai, India** – Indian bank loan growth continued its downward trend in February, marking the eighth consecutive month of deceleration, according to Reserve Bank of India (RBI) data released Thursday. The slowdown, attributed to stricter lending regulations implemented late last year, saw year-on-year credit growth fall to 12%, down from 16.6% in the previous year (excluding the impact of the HDFC Bank merger). Including the merger, growth stood at 11%, a significant drop from 20.5% in February 2023.

The RBI’s tighter capital requirements, aimed at mitigating the risk of bad loans, particularly impacted personal and credit card loans. Personal loan growth plummeted to 8.4% year-on-year in February (excluding the merger), a sharp decline from 19.5% the previous year. Credit card debt growth also fell significantly, dropping to 11.2% from 31%. Loans to non-banking financial companies (NBFCs) also experienced a downturn, contributing to a slowdown in services sector credit growth.

While the RBI recently relaxed some capital requirement rules, analysts predict the positive effects on the economy will take several months to materialize. The slowdown reflects a deliberate effort by the central bank to cool rapid loan expansion seen in previous years, fueled by high demand for unsecured retail loans. Although industrial loan growth remained positive at 7.3%, it also showed a decrease compared to the previous year. The overall trend indicates a significant shift in India’s banking landscape, with a clear focus on managing risk and optimizing liquidity.

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