Synopsis:
- Credit offtake rose by 15.9 % (y-o-y) for the first quarter of FY24. In absolute terms, credit expanded by Rs.9.8 lakh crore from June 2022. The growth has been driven by sustained personal loan demand and NBFCs.
- Deposits witnessed a slower (compared to credit) growth at 12.6% (y-o-y), supported by term deposits which were offset by high base and slow CASA growth.
- Scheduled Commercial Banks’ (SCBs) y-o-y growth in term deposits at 17.4% outperformed current account and saving account (CASA) growth at 6.4% as term deposits have seen a sharper growth in interest rates, and hence customers are shifting, as well as adding funds from low yielding CASA deposits to term deposits.
- In last three years, (i.e., from March 2020) credit offtake has mostly overcome the Covid-induced lag and has grown by around 35.8% to almost catch up with deposit growth of 36.6% over the same period.
- The Credit Deposit (CD) ratio of SCBs rose by 210 bps y-o-y at the end of June 2023, due to higher credit growth and reached 75.8%.
- Meanwhile, the o/s Weighted Average Lending Rate (WALR) on SCBs increased sequentially by 10 basis points (bps) from 9.72% in March 2023 to 9.82% in June 2023. The o/s Weighted Average Term Deposit Rate (WATDR) for SCBs increased sequentially by 31 bps from 6.16% in March 2023 to 6.47% in June 2023. Over the last year, due to the increase in repo rate (210 bps), we have seen a steep increase in o/s WALR and o/s WADTR increasing 90 bps and 134 bps, respectively
