MUMBAI: Indian banks’ credit growth doubled to 16.8% in the October-December quarter from a year earlier, data released by the Reserve Bank of India (RBI) showed on Monday.
According to the data, bank loans increased by 8.4% in the quarter ending in December 2021 and 17.2% in the quarter ending in September 2022.
Credit growth was led by bank branches in metropolitan centres, which accounted for nearly 60% of total bank credit, the RBI said. Urban, semi-urban and rural centers also recorded double-digit credit growth, it added.
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Growth in state-owned lenders’ loan portfolios jumped, increasing by 15.7% during 2022 compared to 4.7% in 2021. Corresponding growth for private banks remained higher, however, at 19.1%, up from 13.1% in 2021, according to the data.
With the Indian economy improving after the COVID pandemic, credit offtake has improved and most banks now expect double-digit credit growth for the current financial year ending March 2023.
Deposit growth, on the other hand, has lagged credit growth for most banks, despite the RBI’s rate-setting panel raising the policy repo rate by 250 basis points since May last year.
Banks’ aggregate deposits increased by 10.3% year-on-year in the December quarter, from 9.6% in the same quarter of the previous year, led by growth in term deposits, the data showed.
The mobilization of deposits by state-owned banks recorded an annual growth of 8.8% in the December quarter, lower than the growth of deposits in private sector banks of 13.2%, RBI said.
Banks’ credit-deposit (CD) ratio increased further to 75.9% in the December quarter, from 74.8% in the previous quarter and 71.6% in the quarter ended December 2021, according to the data.