BFSI sector recorded a steady credit with strong growth in overall outstanding loans increasing by approximately 16 per cent on a yoy basis in April, 2024. Deposit growth picked up yoy and is likely to see further uptick in the current rising interest rate regime.
On a month on month basis, the outstanding loans across scheduled banks witnessed an uptick of 0.2 per cent and 16 per cent uptick yoy recording Rs 165.5 trillion loans across scheduled banks in April 2024, compared to Rs 165.1 trillion in March, Rs 161.1 trillion in February 2024 and Rs 159.2 trillion in January 2024, revealed the latest data by 1Lattice.
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 13 per cent yoy growth in April. On a month on month basis, deposits across scheduled banks witnessed a slight decline of 0.3 per cent, recording Rs 212.9 trillion deposits in April 2024 compared to Rs 213.4 trillion deposits in March 2024 and Rs 205.4 trillion deposits in February 2024, revealed the 1Lattice data.
In the past two years, the aggregate deposit growth had undergone a slight moderation during 2021-22.
A 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 further revealed that the non-cash retail transactions witnessed a significant spike by approximately 18 per cent yoy in April 2024.
The non cash retail transactions were 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 19.6 trillion transactions, CTS with Rs 6.6 trillion transactions and credit and debit cards with Rs 1.5 and Rs 0.4 trillion transactions respectively in April 2024, the data highlighted.
Total non-cash retail transactions by value recorded was Rs 16.4 trillion in April 2024 with an 18 per cent Yoy growth, compared to Rs 81.8 trillion transactions by value with a 18 per cent yoy growth in March 2024. However, on a month on month basis, non-cash retail transactions witnessed a significant decline of 16 per cent in April 2024.
