Domestic rating agency Crisil in its latest report has said that banks' credit growth is likely to moderate marginally in the current financial year (FY27) and delinquencies would rise amid uncertainties stemming from the ongoing West Asia conflict.  

The agency said the banking system will register credit growth of around 13 per cent in FY27, a marginal decline from the 14 per cent projected for FY26. It said the gross non-performing assets (NPAs) in the banking system have bottomed out, and may rise by up to 0.20 per cent to 2.5 per cent by March 2027. 

Crisil’s chief rating officer Krishnan Sitaraman has highlighted that loans to micro, small and medium enterprises (MSMEs) with exposure to West Asia, either through export markets or raw material sourcing, are the key monitorable, along with micro-loans against property and some unsecured advances. He acknowledged that entities in sectors, such as ceramics and diamond polishing, have already faced adverse impact because of the war in West Asia.