Bank credit increased by 16.8% in Q3: RBI

The Reserve Bank of India (RBI) said on Monday that the banking system’s loan growth for the three months ending December 31 was 16.8%, up from a rise of 8.4% in the same period a year earlier and a rise of 17.2% at the end of the second fiscal quarter.

Bank branches in metropolitan areas, which make up roughly 60% of all bank credit and saw lending increase by 17.2% year over year, were the main contributors to the loan growth. According to the RBI, credit expanded by over 10% in urban, semi-urban, and rural areas.

Private sector banks, which experienced a 19.1% Y-o-Y increase in 2022 compared to a 13.1% increase a year earlier, were the ones driving the loan growth. Throughout the year, public sector banks boosted their lending portfolio by 15.7% compared to 4.7% in 2021.

On the other hand, total deposits rose 10.3% year over year in Q3FY23 as opposed to 9.6% in Q3FY22, driven primarily by a 13.2% increase in term deposits. Deposit growth for current and savings accounts was moderate at 4.6% and 7.3%, respectively. While it increased from 6.9% to 8.8% during the quarter, PSBs’ deposit mobilisation nevertheless lagged behind private lenders’ 13.2% deposit growth.

The credit-deposit (CD) ratio for all of India increased during the quarter to 75.9% from 74.8% in Q2FY23 and 71.6% a year earlier. In the states of Andhra Pradesh, Maharashtra, Tamil Nadu, and Telangana, banks’ CD ratios remained above 100%.

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