Retail, farm segments set to drive credit growth in FY23: CRISIL

Banks' net interest margin should expand in the near term despite credit costs expected to normalise

Strong domestic demand, healthier corporate balance sheets, and a well-capitalised banking sector are expected to steer India towards a 7 per cent gross domestic product (GDP) print in 2022-23.

This is in sharp contrast to the past few years, which were challenging for banks owing to high loan delinquencies. But now, with most of the legacy stress in the corporate loan book recognised, banks have stronger, cleaner balance sheets, allowing them to shift focus back to credit expansion.

Disbursements by banks are likely to outpace those by non-banking financial companies (NBFCs), at 13-15 per cent on-year this fiscal year, vis-à-vis 10-13 per