After several quarters of subdued corporate credit demand, bankers are witnessing a sharp revival in wholesale lending, driven largely by fresh capital expenditure plans across sectors such as oil & gas, infrastructure, metals, renewable energy, data centres, and logistics.
System-wide wholesale credit growth averaged 10.6% in the December quarter, far exceeding the 5–7% growth bankers had anticipated and nearly doubling the 5.9% recorded in the year-ago period. Bankers expect the momentum to strengthen further as uncertainties around punitive US tariffs begin to ease.
In the first quarter, average wholesale loan growth stood at a modest 3.6%, rising to 8% in the second quarter and further accelerating to 10.6% in the December quarter. While the Q2 spike was largely driven by working capital demand, the December quarter saw a clear shift toward project and term loans — a strong indicator that India Inc is reviving its capex cycle.
Public sector banks, in particular, have reported stronger traction in corporate lending than most private sector peers, with the notable exception of Axis Bank, which recorded the sharpest growth.
State Bank of India (SBI), the industry leader, said during its earnings briefing that its corporate loan book grew 13.4% in the quarter, compared with just over 3% growth in Q2 and 5.7% in Q1. The bank’s corporate loan pipeline, largely comprising term loans, rose to over ₹7.9 lakh crore from ₹7 lakh crore in the previous quarter.
Buoyed by this surge in demand and a strong pipeline, SBI Chairman C.S. Setty revised the bank’s Q4 credit growth guidance upward to 13–15% from the earlier 11–12%.
In percentage terms, Axis Bank recorded the steepest growth at 27% (up from 7% in Q2). Central Bank of India followed with 23.2% growth in its wholesale book, Kotak Mahindra Bank reported 17% growth (versus 4% a year ago), and Bank of Maharashtra posted 14.5% growth. SBI’s growth stood at 13.4%.
Among others, Bank of India reported 11.3% growth in corporate loans, HDFC Bank 10.3% (versus 4.1% a year ago), Punjab National Bank 8.9%, Bank of Baroda 8.1%, Indian Bank 8.16%, Canara Bank 6.95%, Punjab & Sind Bank 6.9%, Indian Overseas Bank 5.2%, Union Bank of India 5.1%, and UCO Bank 3.5%.
ICICI Bank reported 6.5% growth in corporate lending, compared with 5.6% in the trailing 12 months. Axis Bank, which had posted a modest 7% growth earlier, surged to 27% in the latest quarter. Kotak Mahindra Bank’s growth rose sharply to 17% from 4% a year ago.
Axis Bank also reported a 22% rise in its SME book, while its small business, SME, and mid-corporate segments grew 5%. Total advances rose 14% to ₹11.6 lakh crore.
In contrast, IndusInd Bank’s wholesale book contracted sharply by 28% to ₹1.12 lakh crore, as its large corporate portfolio shrank 40% year-on-year and declined 5% sequentially.
SBI’s chairman attributed the pick-up in credit demand to a revival in economic activity from late September, aided by GST rate cuts and festive spending, which lifted working capital demand by nearly four percentage points.
He added that recent trade agreements with the EU, New Zealand, Oman, and the ongoing negotiations with the US are encouraging companies to diversify markets, prompting them to seek both working capital and term loans for capacity expansion.
Central Bank of India CEO Kalyan Kumar said the bank has an undisbursed corporate loan pipeline of around Rs25,000 crore as it entered the fourth quarter.
Private sector banks echoed similar trends, citing strong demand from infrastructure-linked industries, metals, power, and emerging segments such as green finance (EVs, solar), data centres, and logistics, along with improved traction in working capital lending.
Bankers expect loan demand across most sectors to remain strong in early 2026, supported by the trade agreements, robust domestic growth, and the RBI’s move to double collateral-free loans to small businesses to Rs20 lakh.