Synopsis :
- Net Interest Income (NII) of Scheduled Commercial Banks (SCBs) grew by 17.0% year-on-year (y-o-y) to Rs. 1.89 lakh crore in Q2FY24 due to healthy loan growth and a higher yield on advances over the year-ago period.
- SCBs reported a robust rise in advances at 20.0% y-o-y in Q2FY24 driven by the merger, personal loans and NBFCs. Meanwhile, SCBs witnessed a 13.5% y-o-y deposit growth for the quarter. PVBs’ deposits rose by 17.4% y-o-y while PSBs registered a slower pace of 9.6%. Deposit growth lagged credit growth with sluggish current account and saving account (CASA) growth, which was partially offset by the growth in Time Deposits.
- The Credit and Deposit (C/D) ratio stood at 79.0% as of September 30, 2023, expanding by ~400 bps y-o-y over a year ago due to widening credit-deposit growth and HDFC merger impact.
- The Net Interest Margin (NIM) SCBs contracted by 14 basis points (bps) sequentially to 3.13% driven by a drop in the NIM of large PVBs. However, large PSBs and other PVBs saw a single-digit downtick, which can be attributed to the merger and deposit rates growing while the lending rates mostly plateauing.
- In terms of y-o-y performance, SCBs reported an improvement of 4 bp. It would have reported larger growth had the large PVBs not dropped by 19 bps.
