Private banks in India are optimistic about a pickup in retail credit growth in the fiscal year 2026-27 (FY27), following a lackluster performance in the previous year. While retail lending remained in single digits in the fourth quarter of FY26, corporate and micro, small, and medium enterprise (MSME) lending have fueled overall credit growth. A senior executive from a major private sector bank noted that sectors such as data centres, green energy, and defence are performing well, allowing banks to leverage strong client relationships. HDFC Bank reported a 6.5% year-on-year increase in its retail book, significantly lower than the 17.2% growth in its small and mid-market segment and 13% in corporate lending. Similarly, Axis Bank's retail loans grew 8%, compared to a 24% increase in SME lending and a 38% rise in corporate loans. ICICI Bank also saw its retail book grow 9.5%, but corporate growth was nearly equal at 9.3%. As refinancing pressures ease and interest rates stabilize, banks expect retail disbursement growth to translate into more substantial book growth over the coming quarters.