Credit flows in India experienced a remarkable 38% increase in FY26, totaling ₹44.6 lakh crore, a significant recovery from the 8% contraction in FY25. This surge indicates a revival in borrowing demand, largely attributed to the Reserve Bank of India's (RBI) easing monetary policy, which began in February 2025 with a cumulative 125 basis points cut in policy rates and a 100 basis points reduction in the cash reserve ratio. The outstanding flow of financial resources to the commercial sector surpassed ₹300 lakh crore for the first time, growing 15.8% to ₹311.8 lakh crore compared to 11.7% growth the previous year. Non-food credit to the commercial sector also rose 16% to ₹213 lakh crore as of March 31, 2026. The easing of rates led to a transmission of 87 basis points in lending rates, bringing them down to 9% from 9.87% a year earlier. Additionally, funds raised from foreign sources saw a 50% increase, with foreign direct investment rising to ₹3.24 lakh crore from ₹2.17 lakh crore in the previous year, reflecting a robust recovery in credit demand.