Bankers' sentiments on loan demand remained upbeat till Q4FY26

Reserve Bank released the results of 32nd round of its quarterly Bank Lending Survey (BLS), 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 Q1:2025-26, collected senior loan officers’ assessment of credit parameters for Q1:2025-26 and their expectations for Q2, Q3 and Q4 of 2025-26.

Bankers’ assessment for Q1:2025-26 on loan demand recorded a seasonal moderation across major sectors during Q1:2025-26. Majority of the responding banks assessed continuation of easy terms and conditions for loans. Bankers’ outlook on loan demand improved for Q2:2025-26, they expect more loan demand particularly from agriculture, mining and quarrying, manufacturing, and retail/personal loan segments. Bankers expect some easing of loan terms and conditions, especially for the manufacturing and services sectors.

Across major sectors, bankers’ sentiments on loan demand remained upbeat till Q4:2025-26. The current easy loan terms and conditions are expected to continue in the second half of 2025-26.

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