The BFSI sector recorded a steady credit with strong growth in overall outstanding loans increasing by approximately 15 per cent on a yoy basis in July, 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 a decline of 2.5 per cent and 15 per cent uptick yoy recording Rs 167.5 trillion loans across scheduled banks in July 2024, compared to Rs 171.8 trillion in July, Rs 167 trillion in May, Rs 165.5 trillion in April, Rs 165.1 trillion in March and Rs 161.1 trillion in February, 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.
ALSO READ| Monthly Credit Records : 16% uptick in overall outstanding loans in June 2024
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 11 per cent yoy growth in July. On a month on month basis, deposits across scheduled banks witnessed a slight decline of 1.8 per cent, recording Rs 215.6 trillion deposits in July, compared to Rs 219.6 trillion in June, Rs 214.5 trillion deposits in May, Rs 212.9 trillion deposits in April, Rs 213.4 trillion deposits in March and Rs 205.4 trillion deposits in February 2024, revealed the 1Lattice data.
ALSO READ| Monthly Credit Records : 16% uptick in overall outstanding loans in May’24
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 21.6 per cent yoy in July 2024.
The non cash retail transactions by value were mainly dominated by the NEFT mode of payment, followed by Unified Payments Interface (UPI).
ALSO READ| UPI transactions witnesses 3% rise clocking record high of 14.96 bln transactions in Aug’24
NEFT recorded Rs 36.6 trillion worth of transactions, followed by UPI with Rs 20.6 trillion transactions, CTS with Rs 6.1 trillion transactions and credit and debit cards with Rs 1.7 and Rs 0.4 trillion transactions respectively in July 2024, the data highlighted.
