Synopsis
- Credit offtake continued to grow at a similar pace sequentially, increasing by 19.8% year on year (y-o-y) to reach Rs. 150.4 lakh crore for the fortnight ended Sep 8, 2023. This surge continues to be primarily driven by the impact of HDFC’s merger with HDFC Bank, as well as growth in personal loans. Meanwhile, if merger impact is excluded, credit grew at a lower rate of 15.1% y-o-y fortnight compared to last year. The outlook for bank credit offtake remains positive, with a projected growth of 13-13.5% for FY24, excluding the merger’s impact.
- Deposits too witnessed healthy growth, increasing by 13.6% y-o-y for the fortnight (including the merger impact). The deposit growth has continued to increase, reaching a 6-year high. Deposit growth is expected to improve in FY24 as banks look to shore up their liability franchise and ensure that deposit growth does not constrain the credit offtake.
- The Short-term Weighted Average Call Rate (WACR) stood at 6.71% as of September 15, 2023, compared to 5.16% on September 16, 2022, due to pressure on short-term rates basis recent incremental cash reserve ratio (I-CRR) norms by RBI.
