Credit Offtake Continues to Rise, Time-Deposit Growth Hits 9-Yr High

• Credit offtake continued to grow, increasing by 19.3% year on year (y-o-y) to reach Rs. 153.4 lakh crore for the fortnight ending October 6, 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 the impact of the merger is excluded, credit grew at a lower rate of 14.7% 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 13.5% y-o-y for the fortnight (including the merger impact). Excluding merger impact growth stood at 12.7%.  Sequentially we saw an increase of 1.7%. 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 6.70% as of October 13, 2023, compared to 6.10% on October 14, 2022, due to pressure on short-term rates.

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