According to a Moneycontrol article on August 26, Indian banks anticipate a resurgence in loan demand in the second half of the current fiscal year (H2FY26). Bankers anticipate growth of 10–12%, mostly due to the impending holiday season starting in September.
State-owned banks are seeing strong demand for retail loans, especially in the automobile and consumer durable categories during the present holiday season, as a result of the government’s recent cut in the Goods and Services Tax (GST), according to bankers who spoke to Moneycontrol.
They went on to say that the increase in retail demand is propelling the banking system’s total loan growth and may exceed previous estimates of 10–12% growth for the current fiscal year.
A top public sector lender said, “It is evident that the festive momentum and the GST drop have improved consumer morale.” “Auto loans and loans for expensive products like electronics and household appliances are experiencing tremendous popularity.”
At a period when the market often experiences increased demand, the GST cut has reduced the cost of a number of consumer products and automobiles, leading to increased discretionary expenditure. Manufacturers and dealers have also introduced aggressive holiday promotions, which has increased credit even further.
According to a Moneycontrol article on August 26, Indian banks anticipate a resurgence in loan demand in the second half of the current fiscal year (H2FY26). Bankers anticipate growth of 10–12%, mostly due to the impending holiday season starting in September.
Despite ongoing trade uncertainty and tariff dangers, experts believe that the GST reduction have created the conditions for a demand recovery that may result in more robust bank lending.
The reductions occur weeks before the busiest festival season, when high-priced purchases of cars, consumer durables, and even houses usually increase.
Even as Trump’s tariffs threaten the nation’s exports, the goods and services tax council lowered levies on small cars, televisions, air conditioners, textiles, and a variety of household goods from September 22 on September 3. This was part of a significant rate overhaul intended to boost consumption before the holiday season.