Robust Growth for Net Interest Margin Continues, Improves by 46 bps in Q4

• Net Interest Income (NII) of Scheduled Commercial Banks (SCBs) grew by 29.5% year-on-year (y-o-y) to Rs.1.83 lakh crore in Q4FY23 due to healthy loan growth and a higher yield on advances over the year-ago period.
• The Net Interest Margin (NIM) of Scheduled Commercial Banks (SCBs) witnessed a year-on-year improvement of 46 basis points (bps), reaching 3.3% in Q4FY23. This enhancement can be attributed to the faster repricing of loans, whereas deposit rates have not yet reflected the increased interest rates. The anticipated rise in deposit costs, which is expected to be a lag effect, is likely to be counterbalanced by the withdrawal of Rs 2000 denomination banknotes in Q1FY23.
• SCBs reported a robust rise in advances at 17.3% y-o-y in Q4FY23 mainly driven by personal loans, NBFCs, and MSMEs with similar growth for private sector banks (PVBs) and public sector banks (PSBs).

Net_Interest_Margin_in_Q4FY23 (1)