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Below the Pre-Budget Quote on Banking & credit expansion (Beyond PSU Recapitalisation) from Akhilesh Pandey, Partner & Practice Leader, Financial Due Diligence, BDO India

“With credit expansion continuing to be robust yet lopsided, the Budget 2026 is therefore likely to favour credit flow to less penetrated sectors as opposed to headline recapitalisation of the banks. The focus of policy will probably be on credit guarantee improvements, lending credit to MSMEs risk-sharing, and enhancing recoveries under IBC. In our view, the quality of transmission of credit is much more important than raising balance sheets. The next banking cycle will be characterised by sustainable credit growth.”

Potential Effects: Improved credit allocation, reduced NPAs, improved lending cycle.

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