Hi everyone,  
 
Welcome to the 173rd edition of The Pattern, a weekly newsletter decoding the latest in the economy, finance and technology.  
 
With Dussehra celebrations just concluded, the burning of Ravana reminds us that unchecked power eventually collapses on itself. Banks are seeing optimism across agriculture, manufacturing, services and infra. Sanctions surged by 86% to ₹33,148 crore in H1, disbursements rose by 54%, and the RBI’s Bank Lending Survey shows confidence at a multi-quarter high. The credit cycle, which was long subdued, is now seeing signs of dawn.  
 
But growth, like Ravana, rarely comes with one head. With more lending comes more leverage, more risks, more moving parts. The RBI knows this too well. Which is why, even as it opens new corridors for borrowing - raising the ceiling on loans against shares 5x to ₹1 crore, expanding IPO financing, and scrapping caps on lending against listed debt - it is also building a watchtower in the background. That watchtower is the Digital Payments Intelligence Platform (DPIP), a real-time system designed to scan the billions of transactions flowing through India’s pipes and catch fraud before it multiplies. 
 
The arrow and the rope 
 
India’s credit cycle right now feels like three strands being woven into one rope. The first is optimism. Banks are finally looking up again – demand is rising against agriculture, infra, manufacturing and services. The RBI’s survey puts net demand response at 38.9% in Q2, higher than the previous quarter, and that optimism isn’t just talk. It’s already showing up in numbers: loan sanctions have jumped 86% to ₹33,148 crore in H1 and disbursements are up 54%.  And, here’s the shift worth noting – corporate lending is starting to edge out the retail-heavy mix that’s dominated the last few years.  
 
The second strand is discipline. The Digital Payments Intelligence Platform isn’t about pulling the brakes on credit; it’s about keeping it on track. Think of it as the bowstring keeping the arrow straight. Expansion and control aren’t rivals in this case – they're partners. Growth is being let loose but only under the scrutiny that is strong enough to keep trust in place.  
 
 
Can this boom end differently?  
 
India’s credit booms have rarely had happy endings. Microfinance in the 2010s, NBFCs in 2018, even retail lending waves after 2008 all grew faster than the system could handle - and each eventually snapped back with a correction.  
 
This time feels different. The RBI is increasing credit limits, lifting loan against shares fivefold, easing IPO financing, removing caps on debt lending - while strengthening oversight through tools like the Digital Payments Intelligence Platform. The crux here is that growth is welcome but not at the cost of control. If by any chance, this balance manages to hold itself, this could mark the first credit cycle where expansion and discipline rise together instead of colliding.  
 
Why it matters going forward  
 
1. Corporate – led growth: Higher limits on loan against shares and IPO financing can shift momentum towards corporates. Infra, energy and capital markets could lead this cycle, while household consumption plays a smaller role.  
 
2. Scale and fragility: UPI now processes 12 billion monthly transactions. Even a tiny fraud rate becomes systemic. DPIP is less about compliance, more about trust.  
 
3. Market linked risk: With more credit tied to equity and debt, banks gain depth but face sensitivity to market swings.  
 
4. Global divergence: While advanced economies stay cautious under sticky inflation, India is opening up credit but with checks in place. If things stay stable, this could attract more foreign money. If not, it can make the market volatile as well.  
 
The bigger reflection 

Dusshera is not only about defeat of Ravana; it is also about the beginning of something new. Once the effigies turn to ash, the festival marks new beginnings – the clearing of space for a fresh new cycle.  
 
India’s credit system seems to be at a similar point. The old cycle of unchecked booms followed by strict checks seems to be correcting itself.  
 
If that balance holds, this upturn won’t be just another swing in the credit pendulum. It could be a reset – a moment where India’s financial ecosystem learns to grow without repeating old mistakes. And that much like Dusshera’s promise of new beginnings would be a turning point worth remembering.  
 
Reading list 

1. Loan sanctions grow 86% to Rs 33148 cr in H1 
2. RBI’s Digital Payments Intelligence Platform to flag risky transactions 
3. RBI to relax curbs on loans against shares, IPO financing 
4. RBI to ease norms for banks’ corporate exposure via market securities, to repeal earlier framework  
5. RBI allows Indian banks to fund corporate acquisitions 
6. In major reforms, RBI expands credit for companies; limits on loans-against-shares hiked 5× to ₹1 cr 
7. India’s NPCI announces new UPI rules from August 1: balance-check limits, auto-pay timings revised, fraud prevention strengthened  

 
Thank you for reading. If you liked this edition, forward it to your friends, peers, and colleagues. You can also connect with me on X here and follow FinBox on LinkedIn to get the latest updates.  

Cheers,  
Mayank