Credit Offtake

Credit quality improves as stage-3 assets dip to 4.6%

The growth is driven by a low base, NBFC, retail credit, higher working capital demand driven by inflation and improvement in capacity utilisation ratio, and rising demand for fresh capex

Why is demand for private credit on the rise?

The festival month saw 18.3% growth in non-food credit offtake. Retail loans -- driven by robust housing and vehicle loans demand -- saw a 20% jump. What explains this surge in personal loans?

The rise in credit was largely driven by housing and vehicle loans segments

Credit growth to the services sector accelerated to 17.2 per cent in August 2022 from just 2.1 per cent a year ago. It was mainly due to improved credit off-take to NBFCs and trade sectors.

Reserve Bank of India (RBI) data showed that credit to industry grew 10.5 per cent in July 2022 against a mere 0.4 per cent in July 2021

Slow deposit growth may create funding challenging for lenders in the festival season

Bankers said the rise in credit offtake now is partly driven by expansion in economic activity

Rise in stressed assets may not push bills for provisions as lenders maintain higher provision coverage ratio for few quarters

In a Q&A, Rajkiran Rai G says retail credit can't make up for tepid corporate demand

HDFC Securities pointed out that industrial credit growth remained muted although registering positive YoY growth for the first time since September.

Bank loans to corporate houses, excluding bank loans to NBFCs, is expected to remain subdued in FY20

Finance Minister Nirmala Sitharaman will hold a review meeting with CEOs of public sector banks (PSBs) next week to discuss various issues, including progress on credit offtake. The meeting, scheduled to be held on October 14, is expected to review fund flow to stressed NBFC and MSME (micro, small and medium enterprises) sectors, sources said. Banks are expected to present report card on partial credit guarantee scheme and fund raising from market to enhance their capital base. The Centre in August issued guidelines on operationalising Rs 1 lakh crore partial guarantee scheme under which PSBs can purchase high-rated pooled assets of financially sound non-banking finance companies (NBFCs). NBFCs, including housing finance companies (HFCs), came under stress following a series of defaults by the group companies of IL&FS in September last year. Besides, the meeting will also assess the progress of first phase of outreach programme held across 250 districts across the country. This .

Banks Board Bureau to meet heads of public sector banks today to discuss bad loans issue