Axis Bank forecasts 15% to 16% credit growth for 2026 amid FCNR boost
Axis Bank CEO Amitabh Chaudhry warns that current high credit expansion is temporary due to foreign currency deposits, predicting a full-year growth of 15% to 16% and potential interest rate hikes in October and December.
Amitabh Chaudhry, chief executive of Axis Bank, stated at the Global Fintech Fest 2026 in Mumbai that record inflows into Foreign Currency Non-Resident-Bank deposits are likely to end, slowing bank lending. The company's economists project total credit expansion will reach between 15% and 16% for the year, down from the current 18% to 19% seen so far. Chaudhry explained that foreign currency deposits strengthened funding positions temporarily but may not sustain abnormal lending growth as the economy absorbs the surplus liquidity. He noted a narrowing interest-rate differential between India and the United States created an economic problem requiring action. Chaudhry indicated domestic rates could rise in October and December, based on projections from his economists. He also suggested industry consolidation is necessary for banks to compete effectively in the future market environment.
