Credit offtake continues to rise but at a slower pace: CareEdge Ratings, ET BFSI
New Delhi [India], March 27 (ANI): Credit offtake continues to rise however at a slower tempo as in comparison with final 12 months. As of March 7, complete bank credit stood at Rs 181.3 lakh crore, reflecting an 11.1 per cent year-on-year (YoY) development says a report by CareEdge Ratings
It mentioned, “Credit offtake picked up marginally, whereas deposit development slowed over the earlier fortnight”.
That is decrease than the 12.1 per cent development recorded in the identical interval final 12 months (excluding the impression of mergers). The slowdown is attributed to the next base impact, together with the Reserve Financial institution of India’s (RBI) measures and considerations over the excessive credit-to-deposit ratio.
However, complete financial institution deposits reached Rs 225.1 lakh crore as of March 7, rising by 10.2 per cent YoY. That is barely decrease than the ten.5 per cent development recorded within the earlier 12 months.
The slower deposit development is essentially because of the next base impact and tight liquidity situations, regardless of banks providing enticing time period deposit charges.
Sequentially, credit score offtake rose by 0.88 per cent within the fortnight ending March 7, however the development was slower than final 12 months’s tempo. The RBI has repeatedly highlighted considerations over the rising credit-to-deposit ratio, which signifies that credit score development is outpacing deposits.
Nevertheless, this hole stays considerably decrease than the 6.70 per cent recorded in the identical interval final 12 months.
The info of March 7, 2025, is in contrast with the information from two weeks earlier to watch modifications in credit score and deposit development.
The next credit-to-deposit ratio means that banks are lending extra in comparison with their deposit inflows, which might pose liquidity dangers in the long term.
The report indicated that whereas credit score demand stays sturdy, deposit development wants to choose up tempo to assist sustained lending. With tight liquidity situations and the RBI’s cautious stance, the banking sector might want to strike a stability between credit score growth and steady deposit inflows. (ANI)
