GST bazooka: Lenders raise credit growth guidance for FY26

Core Insights - Banks have increased their credit growth guidance for the current financial year due to factors such as GST rate cuts, lower interest rates following a 100 basis points repo cut, and easing banking regulations by the Reserve Bank of India (RBI) [1][2] Group 1: Banking Sector - State Bank of India (SBI) has revised its credit growth guidance from 11% to 12-14% for FY26, citing robust growth across business segments and supportive measures from the RBI and fiscal policies [2] - SBI reported significant demand for car and personal loans following the GST rate cuts in September [3] - Axis Bank anticipates strong credit growth in H2FY26, driven by favorable conditions such as repo cuts, improved liquidity, and a favorable monsoon, despite facing headwinds in H1FY26 [3][4] Group 2: Non-Banking Financial Companies (NBFCs) - Shriram Finance has observed increased credit demand in the last week of September, particularly in the two-wheeler and car segments, and has guided for a loan growth of 15% in FY26, with potential for higher growth of 17-18% [5] - Piramal Finance expects an AUM growth of 25% for the fiscal year, noting that while used car prices have decreased due to GST reductions, the increase in units sold compensates for this [6]