Today, the Reserve Bank released the results of 30th round of its quarterly Bank Lending Survey¹, which captures qualitative assessment and expectations of major scheduled commercial banks on credit parameters (viz., loan demand as well as terms and conditions of loans) for major economic sectors². The latest round of the survey, which was conducted during Q3:2024-25, collected senior loan officers’ assessment of credit parameters for Q3:2024-25 and their expectations for Q4 of 2024-25 and Q1 and Q2 of 2025-26.

Highlights:

A. Assessment for Q3:2024-25

• Bankers assessed higher credit demand across all broad sectors except retail/personal loans, which recorded some growth moderation vis-à-vis the previous quarter (Chart 1 and Table 1).

• Terms and conditions of loans to mining sector were assessed to have tightened but remained easy for the remaining sectors during Q3:2024-25 (Table 2).

B. Expectations for Q4:2024-25

• Bankers expect some moderation on overall loan demand conditions during Q4:2024-25; the high optimism on demand for retail/personal loans tempered even as it improved or remained at previous quarter’s level for other sectors (Table 1).

• Across sectors, easy loan terms and conditions are expected to prevail during Q4:2024-25 except the mining sector where some tightening is expected (Table 2).

C. Expectations for Q1:2025-26 and Q2:2025-26

• Bankers expect seasonal moderation in loan growth across sectors during Q1:2025-26; it is expected to pick up in the subsequent quarter (Table 3).

• Bankers’ expectation of terms and conditions during Q4:2024-25 extend to H1:2025-26.

Note: Please see the attached excel file for detailed time series data.

¹ The results of 29th round of the BLS with reference period as July-September 2024 were released on the RBI website on October 09, 2024. The survey results reflect the views of the respondents, which are not necessarily shared by the Reserve Bank.

² The survey questionnaire is canvassed among major 30 SCBs, which together account for over 90 per cent of credit by SCBs in India.

³ Net Response (NR) is computed as the difference of percentage of banks reporting increase/optimism and those reporting decrease/pessimism in respective parameter. The weights of +1.0, 0.5, 0, -0.5 and -1.0 are assigned for computing NR from aggregate per cent responses on 5-point scale, i.e., substantial increase/ considerable easing, moderate increase/ somewhat easing, no change, moderate decrease/ somewhat tightening, substantial decrease/ considerable tightening for loan demand/loan terms and conditions parameters respectively. NR ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. Increase in loan demand is considered optimism (Tables 1), while for loan terms and conditions, a positive value of net response indicates easy terms and conditions (Table 2).