BFSI sector has recorded steady credit with strong growth in overall outstanding loans increasing by around 15 percent year-on-year in December 2023. Deposit has grown year-on-year and is likely to see further increase in the current rising interest rate regime.
Month-on-month, the outstanding loans through scheduled banks witnessed an increase of 15 percent recording 158.1 trillion rupees of loans through scheduled banks in December, compared to 154.5 and 148.4 trillion rupees recorded in the previous two months, in November and October. respectively, revealed the latest data from 1Lattice.
The Reserve Bank of India in its report on financial stability emphasized that there was a remarkable credit growth in the banking sector, driven by both the public sector banks and the private ones.
Credit growth reached 15.4 percent, with a considerable contribution from the personal loan segment. Personal loans registered a comprehensive growth of 22.2 percent (joy) with all major segments.
Outstanding loans in scheduled banks are growing at a higher rate compared to the deposits.
Deposits through scheduled banks registered about 12 percent growth in December. On a month-on-month basis, deposits across scheduled banks witnessed a slight improvement registering Rs 204 trillion deposits in December, compared to Rs 199.6 trillion deposits in November, 1Lattice data revealed.
In the past two years, the aggregate deposit growth moderated slightly during 2021-22.
A recent report by State Bank of India revealed that between FY14 and FY23, bank credit increased from Rs 60 trillion to Rs 138 trillion, thus registering a credit growth of over 2.3 times. Around the same period, bank deposits increased 2.4 times from Rs 77 trillion to Rs 187 trillion.
Growth in non-cash retail transactions
The 1Lattice data revealed that the non-cash retail transactions witnessed a marginal growth of around 17 percent indeed in December 2023.
Digital transactions were largely dominated by the NEFT mode of payment, followed by Unified Payments Interface (UPI). NEFT recorded 33.6 trillion transactions, followed by UPI with 18.2 trillion transactions, CTS with 5.9 trillion transactions and credit and debit cards with 1.3 trillion and 0.5 trillion transactions respectively in December.
Total non-cash retail transactions by value recorded were Rs 68.4 trillion in December 2023 with 17 percent Yoy growth, compared to Rs 65.7 trillion transactions by value in November.
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