Mumbai: After Covid, India’s borrowing landscape has shown definitive signs of access democratiSation for formal financing, although the pace of change still has room for quickening.

The share of big cities-or metros-in outstanding bank credit has shrunk to 60% in December 2024, from 65% five years ago. By contrast, other geographies now have a higher share. Rural India has a share of 7.8%, up from 6.7%-or a percentage point higher. The share of semi-urban and urban centers climbed to 13.8% from 10.5%, and to 18% from 14.5%, respectively.

Some of the reverse migration spawned by Covid helped prop up credit demand in the hinterland, explains the recent borrowing trend. The latest ” Report on Trend and Progress in Banking” shows that while banks are increasingly emphasising digital channels, physical branches remain the core of customer engagement.

In FY24, 41.9% branches were opened in centers with a population less than 50,000, improving banking penetration in smaller towns and villages.

Private sector banks, which have hitherto been metro-centric, are now heading into the villages. In FY24, private banks accounted for 66% of the new branches and 44% of them were in rural and semi-urban areas, the Reserve Bank of India said.