Mumbai: Icra on Wednesday revised upwards its FY26 bank credit growth estimate to 10.7 -11.5 per cent from the earlier 10.5 per cent driven by festive demand, GST reforms and liquidity boost by RBI.

The rating agency however said gross non-performing assets of the banking system will increase by up to 2.3 per cent after multiple years of a steady decline in the number.

Icra maintained a "stable" outlook for the banking system with no significant capital requirements being anticipated. It said banks remain "cautious" in lending to non-banking financial companies (NBFCs) and the corporate demand is yet to see any meaningful revival till now.

The credit growth is expected to be driven by the retail and micro, small and medium enterprise (MSME) segments, it said, adding that the "episodic

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