Highlighting the stress in the Indian banking industry due to weak economic activity, CARE Research said credit growth for the year 2012-13 will remain at 15.1 per cent.
Credit growth had declined to 17.7 per cent in August compared with 20.8 per cent in August 2011.
According to the report, deposit growth for FY13 will be at 13.3 per cent on the back of slowing domestic savings due to persistent inflation. In addition, incremental credit-deposit ratio declined on higher deposit mobilisation and low credit off-take.
It also expects gross non-performing assets (NPAs) to increase to 3.3 per cent from 2.9 per cent in FY12, while the net interest margins (NIMs) are estimated at 3 per cent for FY13 as against 3.2 per cent in FY12.
Further, share of incremental credit to infrastructure (as a percentage of total incremental industry credit) fell from 35.5 per cent in July 2011 to 29.6 per cent in July 2012 on continued stress in power, aviation and roads sectors.
The research arm of CARE Ratings also expects more restructuring in the power sector on account of approval by the Cabinet Committee on Economic Affairs to the financial restructuring of state distribution companies.
Maintaining the GDP estimates for FY13 at 5.86 per cent, CARE Research expects no rate cut in the second-quarter review of monetary policy due on October 30 on account of easing liquidity and upside risk to food inflation on weak monsoon (low rainfall) and recent increase in fuel prices.
However, it expects a repo rate cut of 25 basis points in the third and fourth quarter.