RBI reports NBFCs lean more on bank funding as credit expands in 2025
The RBI bulletin shows that non-banking financial companies increased their reliance on bank borrowings in 2025 while credit growth, especially in retail and industry, remained strong.
According to the RBI’s latest bulletin, non-banking financial companies lifted their dependence on bank funding in 2025 following the reversal of higher risk-weight rules and a dip in bank lending rates. Combined bank loans, debentures and commercial papers accounted for 77.2% of NBFC financing at the close of December 2025, and the small group of deposit-taking NBFCs recorded a 14.9% rise in public deposits, attracted by competitive rates.
Credit growth remained robust, led by retail and industry segments; trade and commercial real-estate services posted double-digit gains, while vehicle loans decelerated and gold loans expanded, contributing 10.5% of incremental credit. Secured lending continued to dominate, representing roughly three-quarters of loans, though unsecured lending grew on a base-effect. The RBI highlighted the sector’s increasing digitalisation, noting AI’s emerging role and the establishment of the FREE-AI committee to guide responsible AI use.
Why it matters
Higher NBFC reliance on banks and AI adoption may reshape credit flow and financial stability in India.
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