New Delhi, March 31 -- The credit growth of India's banking sector is likely to rise to 13 per cent in the financial year 2025-26 (FY26) from the current level of 11.2 per cent, according to a report by Anand Rathi.

The report highlighted key factors contributing to this growth, including liquidity infusion, regulatory easing, and government spending.

In the past three months, the banking sector has witnessed strong liquidity support due to measures like the Cash Reserve Ratio (CRR) cut and a reduction in Risk-Weighted Assets (RWA) for lending to Non-Banking Financial Companies (NBFCs). These steps indicate a more accommodative regulatory approach by the Reserve Bank of India (RBI).

Additionally, the government's tax reduction policy, ...