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HomeBusinessBanks almost double credit growth in FY22 - Times of India

Banks almost double credit growth in FY22 – Times of India

MUMBAI: The tempo of financial institution credit growth hit 9.6% in FY22, up from 5.6% in FY21, whilst deposit growth slowed to eight.9% final fiscal from 11.4% in the yr-in the past interval. A Rs 1.8-lakh-crore surge in lending in mid-March helped banks add Rs 10.4 lakh crore to their mortgage books in FY22. This is almost double the Rs 5.8-lakh-crore growth registered in FY21.
According to knowledge launched by the Reserve Bank of India (RBI), complete financial institution credit stood at Rs 118.9 lakh crore as on March 25 – the final reporting Friday for FY22. This was a growth of Rs 1.8 lakh crore throughout the fortnight and Rs 10.4 lakh crore throughout the monetary yr, registering a yr-on-yr growth of 9.6%.
Bank deposits stood at Rs 164.7 lakh crore – a rise of Rs 1.9 lakh crore throughout the fortnight and Rs 13.5 lakh crore throughout FY22. The growth in financial institution deposits throughout the yr was 8.9%.
Credit continues to be pushed by retail lending. On the wholesale facet, half of the growth is because of the shift from cash markets to loans because the central financial institution began withdrawing extra liquidity. Also, the surge in commodities like oil has elevated the demand for working capital.
The restoration in credit was pushed by the personal sector banks, which accounted for slightly over half of the credit growth (50.4%) with public sector banks contributing 44.7%.
An SBI analysis report stated, “Interestingly, retail loans have emerged as the main driver of bank credit in recent years and now have the largest share (30.5%) in the outstanding credit of all scheduled commercial banks, displacing industrial loans (28.9%). Within retail, housing loans have the largest share.”
According to SBI Group chief economist Soumya Kanti Ghosh, the significance of retail loans has elevated for each personal banks and public sector banks. Because of subdued profitability and deleveraging by corporates, banks shifted their focus away from giant infrastructure and industrial loans in the direction of retail loans.

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