Mumbai, Sept. 10 -- Rating agency Icra Ltd expects bank credit growth to moderate to 10.4-11.3% in 2025-26, from 10.9% in 2024-25 and 16.3% in 2023-24, even as incremental credit flow rises to Rs.19-20.5 trillion from Rs.18 trillion in the previous fiscal year.

The rating agency said on Wednesday that non-banking financial companies (NBFCs), excluding infrastructure lenders, are projected to expand their loan books by 15-17% in the current fiscal year, compared with 17% last fiscal year and 24% in the year prior.

"While the pace of incremental bank credit growth in the current year lags at Rs.3.9 trillion for the first five months of FY26 compared to Rs.5.1 trillion for the previous year, the recent GST (goods and services tax) rate cut...