Deposits mobilisation overtakes credit in fortnight; credit up 16%

Bank credit rose by 15.9 per cent year-on-year (YoY) to Rs 149.81 trillion as of November 3, 2023, reflecting a steady tempo of loan growth amid the festive season.

According to Reserve Bank of India data, sequentially, loans grew by Rs 1.28 trillion from Rs 148.52 trillion as on October 20, 2023. The figures for credit and deposits exclude the HDFC-HDFC Bank merger effect.

Rating agency CARE Ratings in its review has said the outlook for bank credit offtake remains positive, with projected growth of 13-13.5 per cent for FY24, excluding the merger's impact. The credit offtake is supported by factors such as economic expansion and a continued push for retail credit, which has been supported by improving digitalisation. The personal loan segment is expected to perform well compared to the industry and service segments in FY24.

Bank deposits grew by 12.74 per cent YoY to ₹195.80 trillion as of November 3, 2023. Sequentially, banks raised over ₹2.0 trillion in the reporting fortnight, increasing from Rs 193.78 trillion as of October 20, 2023.

The Credit and Deposit Growth Gap Continues to Remain Elevated; growth in the liability franchise will play a significant role in sustaining loan growth, the rating agency said.