Lending Behaviour of Indian Commercial Banks in the Post-Liberalization Period

The lending behaviour of Indian commercial banks has undergone significant transformation since the economic liberalization of 1991. This paper examines the patterns and trends in bank lending, focusing on factors such as credit disbursement, sectoral allocation, non-performing assets (NPAs), and regulatory influences. Using secondary data from the Reserve Bank of India (RBI), World Bank, and other financial reports, this study analyses how liberalization policies have influenced banks’ lending strategies. The findings indicate a shift towards increased credit flow to the services and retail sectors, while traditional sectors like agriculture and industry have witnessed fluctuations. The rise in NPAs post-liberalization highlights the challenges in credit risk management. The paper concludes with policy recommendations to improve lending efficiency and financial stability.