Page 7 - Credit Growth
Credit growth likely to be brisk in FY24 if inflation moderates: Survey
Credit growth is likely to be brisk for MSMEs in FY2023-24 provided inflation remains benign and cost of credit is low, said the Economic Survey 2022-23 presented in Parliament on Tuesday. The Micro, Small and Medium Enterprises sector witnessed a credit growth of about 31 per cent in January-November 2022. "If inflation declines in FY24 and if real cost of credit does not rise then credit growth is likely to be brisk in FY24," the Survey said. Talking about the banking sector in India, the Survey said it has also responded in equal measure to the demand for credit as the year on year growth in credit since the January-March quarter of 2022 has moved into double digits and is rising across most sectors. The finances of public sector banks (PSBs) have seen a significant turnaround with profit being booked at regular intervals and their non-performing assets being fast-tracked for quicker resolution/liquidation by the Insolvency and Bankruptcy Board of India (IBBI), it said. At the
 "Credit growth likely to be brisk in FY24 if inflation moderates: Survey")
War for deposits will intensify
For most banks, the liability part of the balance sheet has been on autopilot, and the strategies have evolved around credit growth and recovery of bad loans. Now the story has to change
Credit growth of scheduled commercial banks tapers off in December
Banks extended loans of almost Rs 1.5 trillion during the fortnight ended December 30
 "Credit growth of scheduled commercial banks tapers off in December")
Financialising the economy
The sector is expected to outperform
 "Financialising the economy")
Pvt banks to report healthy earnings in Q3, aided by robust credit growth
Credit growth in the banking system is touching decadal highs but deposit growth has lagged
 "Pvt banks to report healthy earnings in Q3, aided by robust credit growth")
Mid-rung lenders register 12-26% credit growth in Oct-Dec quarter
Sequentially, few banks have reported higher deposit growth than credit growth
 "Mid-rung lenders register 12-26% credit growth in Oct-Dec quarter")
Banks using quality liquid assets to fund loan growth: RBI report
Credit growth in the system has touched a decade high, a level seen last in 2011
 "Banks using quality liquid assets to fund loan growth: RBI report")
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
 "Retail, farm segments set to drive credit growth in FY23: CRISIL")
Private banks lead in credit growth in Q2 as demand grows: RBI data
Annual growth in working capital loans by banks increasing after contracting in March 2021
 "Private banks lead in credit growth in Q2 as demand grows: RBI data")
Consolidation of PSBs gives a robust base to scale: Bankers at BFSI Summit
Have better underwriting, risk magt to manage high credit growth
 "Consolidation of PSBs gives a robust base to scale: Bankers at BFSI Summit")
Risky lending: Share of subprime borrowers higher at PSBs, shows data
The share of such loans declined between September 2020 and March 2022 in private banks and NBFCs but rose for public sector banks
 "Risky lending: Share of subprime borrowers higher at PSBs, shows data")
Why India's growth should stay resilient
Indian property cycle has multi-year pent-up demand and is more dependent onpricing sentiments (now strengthening) instead of mortgage rates.
 "Why India's growth should stay resilient")
Rate hikes, base effect may temper credit growth in medium term: Analysts
Credit growth stayed robust in October this year amid significant rise in interest rates
 "Rate hikes, base effect may temper credit growth in medium term: Analysts")
Axis Bank likely to issue Rs 12,000 cr of tier-2 bonds amid credit growth
Banks have since November issued more tier-2 bonds than AT-1 bonds for the entire year
 "Axis Bank likely to issue Rs 12,000 cr of tier-2 bonds amid credit growth")
Foreign equity funds pile into Indian financials as credit cycle picks up
Indian shares are trading at a record-high valuation premium to their Asian counterparts, BNP Paribas said
 "Foreign equity funds pile into Indian financials as credit cycle picks up")
Bank credit grows 17.2% YoY to Rs 129.48 trn in fortnight to Nov 18
Deposit growth rises 9.6%, analysts cite FPI flows, govt spending
 "Bank credit grows 17.2% YoY to Rs 129.48 trn in fortnight to Nov 18")
After the runaway rally, analysts say shift from PSBs to private peers
Private sector banks' outlook is brighter on a relative basis, and the players will outperform benchmark indices from a 6-12 months' perspective, analysts say
 "After the runaway rally, analysts say shift from PSBs to private peers")
Economic uptick boosts credit offtake beyond 20% in retail, services
The rise in credit was largely driven by housing and vehicle loans segments
Excess credit growth to limit Indian banks' loss-absorbing ability: Fitch
Rating agency warns capital base of PSBs may come under greater strain
 "Excess credit growth to limit Indian banks' loss-absorbing ability: Fitch")
PNB plans to raise up to Rs 4,000 crore through issuance of tier-2 bonds
The latest round of fundraising by banks comes at a time when credit growth has shown sustained momentum even as growth in deposits continues to lag
 "PNB plans to raise up to Rs 4,000 crore through issuance of tier-2 bonds")
