Upward revision on bank credit growth
Icra raised growth forecast to 15.3% this fiscal from earlier prediction of 12.8%
image for illustrative purpose
What’s Impacting?
- Weaker export demand
- Softer commodity prices
- Challenges in deposit mobilisation
Mumbai: Rating agency Icra on Wednesday revised upward its bank credit growth projection at 14.9-15.3 per cent this fiscal, but said the same will lose steam and grow at 12 per cent next fiscal. At 14.9-15.3 per cent, the system level credit expansion in absolute terms will be Rs20.4-20.9 lakh crore, it said, adding this will be the highest ever incremental bank credit growth and would surpass the previous high of Rs18.2 lakh crore recorded in FY23 at a growth rate of 15.4 per cent.
The agency had earlier estimated a 12.8-13 per cent credit demand for this fiscal. However, citing the rising global headwinds and also the higher base coupled with the challenges in deposit mobilisation, the agency said it expects the rate of incremental credit expansion to slow down to Rs19-20.5 lakh crore or 11.7-12.6 per cent in FY25.
Weaker export demand in certain sectors, softer commodity prices, and challenges in deposit mobilisation could temper bank credit growth in FY2025, it added. Further, the agency estimates corporate bond issuances to reach Rs9.6-9.9 lakh crore in FY24.
