Bank credit growth to slow in FY27; NPAs may rise: Crisil
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Mumbai: Domestic rating agency Crisil on Wednesday said banks’ credit growth is likely to moderate in FY27, while asset quality pressures may re-emerge amid global and domestic headwinds.
The agency expects credit growth of 13 per cent in 2026-27, slightly lower than the 14 per cent projected for FY26. It also cautioned that gross non-performing assets (NPAs), which have bottomed out, could rise by up to 20 basis points to 2.5 per cent by March 2027.
Crisil’s chief rating officer Krishnan Sitaraman flagged loans to micro, small and medium enterprises (MSMEs) as a key monitorable, especially those exposed to West Asia through exports or raw material supply chains. Micro-loans against property and select unsecured segments also warrant close tracking.
Sectors such as ceramics and diamond polishing have already seen stress due to the ongoing West Asia conflict, the agency noted. Beyond external risks, domestic developments such as Bihar’s proposed microfinance legislation and the potential impact of Maharashtra’s loan waiver scheme on credit discipline could influence asset quality.
