Key facts
- Two-thirds of bank loans in India are now priced below 9%.
- This shift follows a year of aggressive rate cuts by Indian banks.
- Credit growth remains strong despite lower pricing.
- Banks' profit margins are facing pressure due to lower loan rates.
- Metropolitan areas and public sector banks are leading in lending.
Indian banks are increasingly offering loans at lower interest rates, with nearly two-thirds of all bank credit now priced below 9%. This trend is a direct consequence of a year of aggressive rate cuts implemented by financial institutions. While this has supported strong credit growth, it is also creating pressure on banks' profit margins.