Credit growth continued to outpace deposit growth in FY’23 at an eleven year high even as banks have transmitted fully -250 bps – their lending rates linked to external benchmarks which now comprise almost half of floating rate loans. Credit demand may not be linked to interest rates but more to economic activity, notings in the RBI’s monetary policy report suggest.
While bank loans rose 14.6 percent in FY’23, deposits rose just 9.6 percent. Credit growth in the last fiscal is the highest since FY’2011-12 during which credit rose 17 percent. Significantly, lending rates rose the steepest in FY’23.
Source:
Economic Times
