Synopsis:
- Credit offtake continued to grow, increasing by 20.0% year on year (y-o-y) to reach Rs. 151.5 lakh crore for the fortnight ended Sep 22, 2023. This surge continues to be primarily driven by the impact of HDFC’s merger with HDFC Bank and growth in personal loans. Meanwhile, if merger impact is excluded, credit grew at a lower rate of 15.3% 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 growth, increasing by 13.2% y-o-y for the fortnight (including the merger impact). However, sequentially we saw a decline of 0.6% as the effect of the Rs 2,000 note deposit started to fade and liquidity remains challenged. Deposit growth is expected to improve compared to current trends 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 6.75% as of September 29, 2023, compared to 5.52% on September 30, 2022, due to pressure on short-term rates.
