Background: Given the high ICT infrastructure in Kerala State and the State’s exceptional attainments like universal literacy, greater share of manpower with higher level of education and technical training, very conducive climate for the growth of tourism sector, rich history of private banking, trade relations with the rest of the world right from historical times, excellent public healthcare infrastructure including trained medical professionals, etc. this study critically analyses Kerala’s growth pattern. The relevance of inclusive growth and also the need for proper use of credit of commercial banks for the sustained growth of Kerala. Accordingly, the current growth that is essentially services sector oriented can be made more industry-oriented in view of the persisting stagnancy noticed in Kerala’s industrial sector over the years. The potential of ICT should be properly leveraged too.

Objectives: To make a critical study of the growth pattern of Kerala economy and relevance of credit facilities from the commercial banks, and to suggest policies for the sustained and balanced growth of Kerala based on the findings of the study.

Methods: A descriptive analytical study based using the authentic secondary data, especially the reports of the RBI and the publications of the State and Union governments. Popular statistical tools have been used for data analysis and interpretation. Results: A detailed study of the reports of the government, the RBI, and other publications and research papers including various policy documents, it is noted that better use of formal sector banking services especially by the labor-intensive sectors like housing and real estate, tourism, MSMEs etc. can accelerate the growth rate of Kerala and that too in a sustainable manner.