Bank Loans surge: GST cut, festive demand drive 11.38% growth

New Delhi: The impact of the reduction in GST rates and the festive season is now clearly visible in bank loans. According to Reserve Bank of India (RBI) data, there has been a sharp increase of 11.38 percent in bank loans in the last 14 days (before October 3). This is the fastest increase in the last eight months. During this period, banks disbursed loans worth Rs 192.66 lakh crore, compared to Rs 172.98 lakh crore in the 14 days ended October 4, 2024 last year. In January 2025, the loan hike was 11.41 percent. Loans increased by 1.92 percent every 14 days.

The government has reformed GST from 22 September. Earlier there were multiple rates of 5%, 12%, 18% and 28%, which have now been changed to only two rates of 5 percent and 18 percent. This made the goods cheaper, which increased shopping during the festive season. Despite the uncertainty associated with tariffs in the US, this move boosted people's purchases. According to a recent report by Bank of Baroda, people stopped shopping in early September because they were waiting for the new GST rates. After the introduction of new rates on 22 September, people started shopping furiously. Due to the increase in demand in the festive season, the market rose.

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According to the IE report, inflation is also decreasing, which is good news for the people. CPI-based inflation was 1.54 percent in September, which is the lowest in eight years. It was 2.07 percent in August. Due to the decrease in inflation, the savings in the pockets of people are increasing, so that they are able to spend more. The income tax relief given in the budget has also increased the spending capacity of the people. Bank of Baroda's report says that due to tax savings in the first six months of the year, people are now spending more in the second half. This is a big reason for the festive season.

Bank deposits up 9.94% to Rs 240.98 lakh crore

Along with loans, bank deposits have also increased. Bank deposits increased by 9.94 percent to Rs 240.98 lakh crore in the 14 days ending October 3, 2025, compared to Rs 219.2 lakh crore in the same period last year. Overall, the reduction in GST rates, lower inflation, income tax relief and festive demand have combined to increase both bank loans and deposits. This is a good sign for the economy, because it is increasing the market and people are buying more.