The BFSI sector recorded a steady credit with strong growth in overall outstanding loans increasing by approximately 20 per cent on a yoy basis in January, 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 1 per cent and 20 per cent uptick yoy recording Rs 159.2 trillion loans across scheduled banks in January 2024, compared to Rs 158.1 trillion in December, Rs 154.5 trillion in November and Rs 148.4 trillion recorded in October, 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 January. On a month on month basis, deposits across scheduled banks witnessed a slight decline of 0.1 per cent, recording Rs 203.8 trillion deposits in January 2024, compared to Rs 204 trillion deposits in December, 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 witnessed a significant spike by approximately 23 per cent yoy in January 2024.
The non cash retail transactions were mainly dominated by the NEFT mode of payment, followed by Unified Payments Interface (UPI). NEFT recorded Rs 33.6 trillion transactions, followed by UPI with Rs 18.4 trillion transactions, CTS with Rs 5.8 trillion transactions and credit and debit cards with Rs 1.3 trillion and Rs 0.4 trillion transactions respectively in January 2024, the data highlighted.
Total non-cash retail transactions by value recorded was Rs 68.6 trillion in January 2024 with a 23 per cent Yoy growth, compared to Rs 68.4 trillion transactions by value and 17 per cent yoy growth in December 2023.
