Synopsis
• Credit offtake continues to be robust, increasing by 20.0% year-on-year (y-o-y) to reach Rs. 159.6 lakh crore, for the fortnight ended December 29, 2023. This rise can be attributed to the impact of HDFC Ltd’s merger with HDFC Bank along with the festival season and growth in personal loans. If we exclude the impact of the merger, credit grew at a rate of 15.7% y-o-y fortnight compared to last year’s growth of 14.9%. The outlook for bank credit offtake continues to remain positive for FY24 with expectations of growth in unsecured personal loans slowing down due to RBI’s action on risk weights.
• Deposits too grew by 13.2% y-o-y for the fortnight (including the merger impact), breaching the Rs 200 lakh crore threshold to reach Rs. 200.8 lakh crore as on December 29, 2023. Excluding merger impact growth stood at 12.6%. Sequentially we saw an increase of 1.5%. Deposit growth is expected to improve in FY24 compared to earlier periods as banks look to shore up their liability franchise.
• The Short-term Weighted Average Call Rate (WACR) stood at 6.73% as of January 5, 2024, compared to 6.08% on January 5, 2023, due to pressure on short-term rates.
