In today’s edition of our monthly newsletter, we look at the
loans and deposit growth in June’24.
We hope you enjoy reading this document and find it
valuable.
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Outstanding loans of scheduled commercial banks touched ~INR
164T in Jun’24 with consumer loans accounting for 33% and loans to the services
sector contributing 29%, making them the major contributors. Overall deposits
touched ~INR 212T in Jun’24 with Y-o-Y growth of ~11%.
- Credit growth to agriculture and allied activities remained
robust at 17.4% Y-o-Y in Jun’24 but it was lower compared with 19.7% Y-o-Y in
Jun’23.
- Credit to industry grew by 7.7% amounting to INR 37.12T on a
Y-o-Y in Jun’24 as compared with 7.4% Y-o-Y in Jun’23. Among major industries,
while Y-o-Y growth in credit to chemicals and chemical products, food
processing, and infrastructure was higher in Jun’24, credit growth to basic
metal and metal products, petroleum, coal products, and nuclear fuels and
textiles moderated.
- Credit growth to the services sector moderated substantially
to 15.1% Y-o-Y in Jun’24 from 26.8% Y-o-Y in Jun’23, primarily driven down by
lower credit growth in NBFCs and trade segments.
- Overall growth in the retail loan segment was lower at 16.6%
(INR 50.9T) in Jun’24 as compared to 21.3% Y-o-Y in Jun’23, largely due to
moderation in growth recorded in ‘other personal loans’ and ‘advances against
fixed deposits’. However, credit growth to housing, the largest constituent of
the segment, accelerated by 18.2% at INR 24.27T in Jun’24 from 14.8% (INR
20.5T) a year ago.
- As of Jun’24, bank credit growth to NBFCs has sharply
dropped to 8.5%, from 16% in May’24, resulting in a reduced loan book of INR
15.54T and a year-to-date growth of just 0.5%. Despite this, credit card debt
and gold jewelry loans are growing robustly at 23% and 30%, respectively.
- The RBI had earlier increased risk weightage on NBFC loans
to curb growth. Credit card outstandings have reached a new high of INR 2.73T,
and gold jewelry loans are at INR 1.23T.