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Credit offtake stays robust at nearly 16% in May, shows RBI data

The deposit mobilisation also saw an uptick at 13 per cent Y-o-Y growth against the 10.4 per cent on May 5, 2023, according to Reserve Bank of India (RBI) data

RBI

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Abhijit Lele Mumbai

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The credit offtake continued to be robust early this month with bank loan growth showing 15.92 per cent year-on-year (Y-o-Y) growth till May 3, which was up from 15.5 per cent a year ago.

The deposit mobilisation also saw an uptick at 13 per cent Y-o-Y growth against the 10.4 per cent on May 5, 2023, according to Reserve Bank of India (RBI) data.

The outstanding advances stood at Rs 161.14 trillion and deposits stood at Rs 208.33 trillion as of May 3, 2024.

These figures do not factor in mortgage lender HDFC’s merger with HDFC Bank.

According to RBI’s monetary policy report released in April, while the pace of credit growth has been above 15 per cent in FY23 and FY24, the pace of deposits mobilisation has gathered pace in FY24.  Deposits grew by 9.6 per cent in FY23 and at a higher rate of 12.9 per cent in FY24, helping to improve resource conditions.  

The professional forecasters have estimated 13.5 per cent Y-o-Y growth in credit in the current financial year (FY25) and the next financial year (FY26), the RBI monetary policy report said.

The incremental credit-deposit ratio remained below 100 per cent during October 2023-March 2024 as against its ruling above 100 per cent for the corresponding period a year ago. This reflected a surge in deposit mobilisation, particularly in the wake of the withdrawal of Rs 2,000 notes.

Consequently, the wedge between credit and deposit growth has reduced. On March 2024, the incremental credit-deposit ratio stood at 95.9 per cent, it added.

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First Published: May 16 2024 | 9:15 PM IST

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