BFSI sector recorded a steady credit with strong growth in overall outstanding loans increasing by approximately 15 per cent on a yoy basis in August, 2023. Deposit growth picked up and is likely to see further uptick in the current rising interest rate regime.
On a yoy basis, the overall outstanding loans increased by 15 per cent, recording Rs 147.1 trillion loans across scheduled banks in August, compared to Rs 145.9 trillion and Rs 147.9 trillion recorded in the previous two months, in July and June respectively, revealed the latest data by 1Lattice (Prev. PGA Labs).
The Reserve Bank of India in its financial stability report highlighted that there has been remarkable credit growth in the banking sector, equally driven by the public sector banks and the private ones.
Credit growth reached 15.4 per cent, with considerable contribution from the personal loan segment. Personal loans recorded a broad-based growth of 22.2 per cent (y-o-y) with all major segments.
Outstanding loans in scheduled banks are growing at a higher pace compared to the deposits.
Deposits across scheduled banks recorded approximately 12 per cent yoy growth in August recording Rs 195.2 trillion deposits, compared to Rs 194.6 trillion deposits the previous month with a 15 per cent yoy growth, revealed the 1Lattice data.
In the past two years, the aggregate deposit growth had undergone a slight moderation during 2021-22.
A recent report by State Bank of India revealed that between FY14 and FY23, the banking credit has increased from Rs 60 trillion to Rs 138 trillion, thereby registering a credit growth of over 2.3 times. Around the same period, bank deposits surged 2.4 times from Rs 77 trillion to Rs 187 trillion.
Growth in non-cash retail transactions
The 1Lattice data revealed that the non-cash retail transactions increased by a whopping 33 per cent yoy in August 2023.
Digital transactions was mainly dominated by the NEFT mode of payment, followed by Unified Payments Interface (UPI). NEFT recorded Rs 31.3 trillion transactions, followed by UPI with Rs 15.8 trillion transactions, CTS with Rs 5.9 trillion transactions and credit and debit cards with Rs 1.2 trillion and Rs 0.5 trillion transactions respectively in August.
Total non-cash retail transactions by value recorded was Rs 62.9 trillion in August 2023 with a 33 per cent yoy growth, compared to 61.6 trillion transactions by value in July, with a 20 per cent yoy growth.
