Bhavesh Jain, MD and CEO of TransUnion CIBIL, said, “We do expect that in the end of the financial year, specifically March, we do expect the demand and supply to go up significantly again.”
While growth has moderated compared to the post-COVID boom years, the underlying trend remains positive.
The festive period gave a clear, though temporary, boost to credit activity. From late September through October, both demand and supply rose sharply, helped by rate cuts, GST-related announcements and festive buying.
Retail credit products that saw strong demand included vehicle loans, two-wheeler loans and consumer durable loans. On the supply side, gold loans also recorded a noticeable jump.
CIBIL’s credit market indicator (CMI), which tracks demand, supply, consumer behaviour and asset quality, improved in the September quarter compared to the previous two quarters. However, the index remains lower than the levels seen in 2023 and 2024.
This, Jain explained, is largely due to a base effect. In 2023, credit growth was unusually strong as the economy rebounded from COVID.
In contrast, 2025 has seen slower balance growth and a lower increase in the number of credit-active borrowers—people who already have loans or are actively seeking new ones.
One of the report’s key findings was the strong performance of Public Sector Undertaking (PSU) banks, whose CMI surpassed that of private banks and non-banking financial companies (NBFCs).
Jain detailed that post-COVID, PSU banks have been strategically building their mortgage and housing loan books, leading to higher portfolio balance growth. “The portfolio quality has improved significantly… PSU banks have performed well on all the four parameters [of the CMI] and hence their CMI is the best,” he said.
Another significant trend is the accelerating credit penetration in non-metro areas. Jain highlighted that semi-urban and rural locations have been leading growth for the last three to four years, driven by increased branch penetration of lenders, digital adoption, and the sheer headroom available for credit expansion.
“It’s largely the tier-II, tier-II, tier-IV and if I have to call out set of geographies… which would stand out would be locations with a population less than 1 lakh,” Jain noted, calling it an encouraging sign of credit reaching the grassroots level.
For full interview, watch accompanying video
