Banks’ Non-Food Credit Grows 20% In October

MUMBAI: Banks’ non-food credit grew nearly 20% year-on-year (YoY) in October, compared with an 18.3% growth during the same period last year, Reserve Bank of India (RBI)’s sectoral credit deployment data showed on Thursday.

Excluding the impact of the HDFC merger, banks’ non-food credit grew 15.3%.

In absolute terms, banks’ outstanding credit stood at Rs 154.05 trillion as of October 20. While loans to the agriculture sector grew 18% YoY to Rs 19.13 trillion, loans to small, medium and large industries grew 6% YoY to Rs 35.72 trillion.

On the services side, loans to non-banking finance companies grew 22% YoY to Rs 14.76 trillion, lower than a 34% growth a year ago, while credit to housing finance companies rose 2% YoY to Rs 3.22 trillion.

Banks’ overall personal loans increased 30% YoY to Rs 49.99 trillion, with housing loans rising 37% YoY to Rs 25.64 trillion, and credit card oustanding rising 28% YoY to Rs 2.40 trillion.

Analysts say banks’ loans to NBFCs and unsecured credit like small-ticket personal loans and credit card loans will likely see a decline in November as the RBI earlier this month hiked the risk weight on such category of loans by 25%.

CareEdge Ratings expects banks’ credit growth to be in the range of 13%-13.5% for FY24, excluding the impact of the merger of HDFC with HDFC Bank.

Separately, RBI data also showed that the weighted average lending rate (WALR) on fresh rupee loans was at 9.50% in October, higher than 9.38% in September. The WALR on outstanding rupee loans of SCBs remained largely flat on a monthly basis at 9.84%, while the one-year median marginal cost of fund-based lending rate remained unchanged at 8.70%.

“The weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits of SCBs moved to 6.31% in October, from 6.32% in September,” the RBI said, adding that WADTR on outstanding rupee term deposits of SCBs was at 6.75% in October, higher than 6.69% last month.

Source: The Financial Express