Synopsis
• Credit offtake continued to grow, increasing by 20.5% year-on-year (y-o-y) to reach Rs. 162.1 lakh crore, for the fortnight ending February 23, 2024. This rise can continue to be attributed to the impact of HDFC’s merger with HDFC Bank along with the growth in personal loans. If we exclude the impact of the merger, credit grew at 16.5% y-o-y for the fortnight compared to last year’s growth of 15.5%. Meanwhile, the outlook for bank credit offtake continues to remain positive.
• Deposits too grew by 13.1% y-o-y for the fortnight (including the merger impact) and reached Rs. 202.0 lakh crore as of February 23, 2024, driven by growth in time deposits. Excluding the merger impact, growth stood at 12.5%. Sequentially it remained flat. Deposit growth is expected to improve compared to earlier periods as banks look to shore up their liability franchise and ensure that deposit growth does not constrain credit offtake.
• The Short-term Weighted Average Call Rate (WACR) stood at 6.61% as of March 01, 2024, compared to 6.47% on March 3, 2023, due to liquidity and pressure on short-term rates.
