DFS Secretary Calls for Responsible Lending Practices to Boost Credit Access for MSMEs and Farmers

India's Financial Sector Remains Resilient Amid Global Uncertainties

Financial Services Secretary M Nagaraju addressed the PICUP Fintech Conference organized by the Indian Banks' Association (IBA) in association with Ficci, urging lenders to practice responsible lending and ensure credit flows to MSMEs, farmers, and small businesses. Expanding access to credit responsibly and efficiently will be crucial for unlocking entrepreneurship and economic potential at the grassroots level.

The government is committed to building a robust and inclusive financial sector, with reforms aimed at improving asset quality, strengthening the regulatory framework, and enhancing credit discipline contributing significantly to this objective. Observing that economic growth, if not inclusive, cannot be sustained for a long time, Nagaraju emphasized the importance of a strong financial system capable of supporting growth during favorable times, while also withstanding shocks during periods of uncertainty.

India's Economic Growth Remains Resilient Amid Global Headwinds

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Despite geopolitical conflicts, supply chain disruptions, elevating interest rates, and other uncertainties, India continues to stand out as a bright spot in the world economy. India's real GDP growth for 2025-26 (April-March) is estimated at 7.6 per cent, higher than the record rate of FY25. The country's financial sector is resilient, with the banking sector standing steady. The gross non-performing assets of scheduled commercial banks were at 2.2 per cent and the net non-performing assets at 0.5 per cent at the end of September 2025, a multi-year low.

The banking sector's strength is increasingly linked to its ability to expand credit to small borrowers at affordable rates. The government's focus remains on strengthening financial institutions and driving financial inclusion, with India becoming the global benchmark for financial inclusion. To maintain this momentum, India needs a policy framework that is reformative and adaptive in nature.

In addition to promoting financial inclusion, India will require more capital to support infrastructure and boost economic growth, with the financial sector expected to be a major contributor to the country's growth. To achieve this, India needs to strengthen and deepen its financial sector to boost capital flows.

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