Synopsis:
- Scheduled Commercial Banks’ (SCBs) credit offtake rose by 12.6% (y-o-y) in Q2FY25. Meanwhile over the last six months, in absolute terms, credit expanded by Rs 13.4 lakh crore from December 2023. This growth has been driven by demand for personal loans, commercial real estate, and MSMEs. The central region outperformed other regions with a y-o-y growth of 14.6%. The metropolitan region, with a share of 60.6% recorded a lower growth of 11.6%.
- Sequentially, credit offtake by SCBs has decreased from 18.8% in Q1FY25. This slowdown in credit offtake can be attributed to slower offtake to NBFCs, whose credit offtake reduced from 21.9% in Q2FY24 to 9.5% in Q2FY25.
- Deposits witnessed a slower y-o-y growth at 11.5% compared to credit, majorly due to rising interest rates in term deposits being counterbalanced by moderate CASA growth. In absolute terms, deposits expanded by Rs. 18.4 lakh crore from December 2023. The metropolitan region saw the highest growth, at 12.3% in Q2FY25 compared to 12.6% in Q1FY25.
- As term deposits witnessed a rise in interest rates, the growth for term deposits stood at 14.4%, which was lower than the 16.6% growth in Q1FY25. Meanwhile, CASA saw a moderate growth of 7.3%.
- The Credit to Deposit (CD) ratio rose by 79 bps y-o-y at the end of September 2024, reaching 79.9%. This increase is mainly due to higher credit growth driven by the merger impact. Sequentially, the CD ratio has decreased by 53 bps, dropping from 80.4% in June 2024 to 79.9% in September 2024, attributed to slower credit growth q-o-q.
