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Credit growth of all scheduled banks has increased by 8.42 per cent year-on-year (y-o-y) as on March 11, 2022, against 6.36 per cent y-o-y growth as on March 12, 2021, going by Reserve Bank of India (RBI) data.
Credit disbursement seems to have picked up in the last two fortnights even as the fourth quarter and the financial year FY22 draw to a close. Banks disbursed loans amounting to ₹74,826 crore in the fortnight ended March 11, 2022, and ₹79,149 crore in the preceding fortnight.
In a recent note, CARE Ratings observed that retail credit has been the key driver for total credit offtake but corporate credit growth pick-up due to overall improvement in business activity is also supportive of aggregate credit growth.
With the Union Budget 2022-23 focusing on the expansion of capital expenditure and infrastructure, credit demand may pick up from industry, the rating agency said.
CARE Ratings said the outlook for bank credit growth is expected to be in the range of 8 to 9 per cent for FY22 with a low base effect, economic expansion, rise in government and private capex (specially, capex for renewables and production linked incentive/PLI schemes), extended ECLGS support and retail credit push.
The medium-term prospects look promising with diminished corporate stress and increased provisioning levels across banks, it added.
Deposits of all scheduled banks increased at a slower clip (by ₹62,302 crore) in the reporting fortnight against ₹91,145 crore in th preceding fortnight.
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