India’s GDP is on course to grow at 7.5% for FY26, projected a new SBI Research report out today. It also revealed that almost all of the year’s bank credit expansion happened in the second half — the October-to-March window, compared to the first half, April to September.
While the total incremental credit growth was Rs 29.5 lakh crore, H1 credit growth was only Rs 5 lakh crore, H2 was Rs 24.5 lakh crore.
In plain terms, banks lent roughly five times more in the second half of the fiscal year than in the first. The report credits the government’s GST rationalisation push, which appears to have unlocked consumer spending and, with it, private borrowing at scale.
The momentum has not faded. As recently as last month, credit was still expanding at pace. “Credit grew by 16% as of 30 April 2026, continuing the same trend,” said the report.
What comes next
SBI expects credit growth to stay strong through the first half of FY27 — April to September 2026 — before slowing in the second half, simply because the comparison base from last year is now so high. Full-year credit growth for FY27 is projected at 13 to 14%.
The external environment remains volatile
Crude oil prices have surged on the back of the US-Iran conflict. The rupee is under pressure. And the IMF has cut its world growth forecast to 3.1% for 2026.
The GDP picture
SBI tracks 50 high-frequency indicators across farming, industry and services. Eighty-five percent of them showed acceleration in Q4 FY26, up from 83% in Q3, underpinning the bank’s Q4 growth estimate of 7.2% and its full-year FY26 call of 7.5%.
For FY27, SBI projects real GDP growth of 6.6%, with the bank explicitly flagging that this number will be revised as geopolitical conditions evolve. Q1 FY27 is pencilled in at 6.8%, with a gradual moderation through the year.
The credit surge of H2 FY26 was the engine of this growth story. Whether it runs through FY27 or fades with the base effect is the number to watch.
