Deposit mobilization and credit raising in banks moderated in the first half of this financial year (H1FY25) compared to the same period of the previous year.
The moderation in credit taking was much more pronounced, with year-to-date growth (through September 20) of 4.2 percent versus 10.8 percent in the first half of FY24 ( first half of FY24), according to data from the Reserve Bank of India. .
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RBI data showed year-to-date deposit growth at 5 per cent for H1FY25, up from 6.9 per cent for H1FY24.
The figures take into account the effect of HDFC’s merger with HDFC Bank.
On a year-on-year (YoY) basis, bank credit growth slowed to 13 per cent through September 20, 2024, from 20 per cent a year ago. Deposit growth moderated to 11.5 percent from 13.2 percent a year ago.
In its outlook for the banking sector, CRISIL Ratings said bank credit growth was expected to moderate to 14 per cent in FY25 from around 16 per cent last financial year. While fundamental drivers of credit demand remain favorable, somewhat slower economic growth (from a high base of 8.2 per cent in FY24) and a review of risk weights on lending to some of the fastest growing segments could moderate growth.
In terms of financing, deposit growth should not lag far behind credit expansion. The spread between credit and deposit growth is estimated to have narrowed to 3 percentage points in FY24 from 5 percentage points in FY23, the rating agency said.
First published: October 4, 2024 | 21:57 IS
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