Scheduled Commercial Banks’ (SCBs) credit offtake rose by 19.3% (y-o-y) in the last quarter of FY24. In absolute terms, credit expanded by R .26.6 lakh crore from March 2023, driven by personal loans and Non-Banking Finance Companies (NBFCs) and merger impact. The western region outperformed other regions with a y-o-y growth of 20.4%, according to a CareEdge report.
Deposits witnessed a slower (compared to credit) growth at 13.6% (y-o-y), supported by term deposits which were partially offset by a higher base and slower current account and saving account (CASA) growth.
In absolute terms, deposits expanded by Rs 24.7 lakh crore from March 2023. The metropolitan region saw the highest growth of 14.7% in Q4FY24 compared to Q4FY23.
Term deposits y-o-y growth stood at 18.8% outperformed CASA growth at 6.7% as term deposits witnessed a growth in interest rates.
The Credit to Deposit (CD) ratio rose by 380 bps y-o-y at the end of March 2024, due to merger and higher credit growth and reached 79.7%.
Meanwhile, the o/s Weighted Average Lending Rate (WALR) of SCBs increased y-o-y by 11 bps and reached 9.83% in March 2024. The o/s Weighted Average Domestic Term Deposit Rate (WADTDR) increased by 72 bps from 6.16% in March 2023 to 6.88% in March 2024.
As of March 31, 2024, credit outstanding touched Rs 164.3 lakh crore, registering a growth of 19.3% y-o-y compared to 16.3% in Q4FY23, with private banks continuing to gain market share. (driven mainly by HDFC merger impact).
Outstanding deposits reached Rs 206.1 lakh crore as of March 31, 2024, registering a 13.5% growth y-o-y. Term deposits saw a double-digit growth of 15.3% and significantly outperformed CASA. Overall deposits of PVBs saw higher double-digit growth of 20.1%, whereas PSBs witnessed single-digit growth of 9.4%.
CASA growth slow
In absolute terms, CASA rose by Rs 5.2 lakh crore in Q4FY24 reaching Rs 86.4 lakh crore as of March 31, 2024. PVBs and PSBs expanded their CASA by Rs 2.5 lakh crore and Rs 2.3 lakh crore, respectively during
the quarter. Overall, CASA rose by 6.7% y-o-y. PVBs reported a CASA growth at 8.5% y-o-y in Q4FY24, whereas PSBs reported a slower growth at 5.4%.
Aggregate current account saw a growth of 10.5% while sluggish growth of 5.5% in savings account moderated the overall growth.
SCBs CASA ratio declined by 262 bps y-o-y and stood at 40.5% as of March 31, 2024, as compared to 43.1% over a year ago due to a rise in term deposit rates which drove higher growth for the term deposit segment.
Further, the term deposit saw growth due to a rise in interest rates.
The competition for deposits is likely to remain intense as banks compete in raising deposits to ensure that deposit growth does not constrain credit offtake.
