Bank credit growth in India is expected to remain positive; Retail Loan Can Do Well: CareEdge Report – The New Indian Express



NEW DELHI: The outlook for bank credit growth in India, which has seen modest growth in recent years, is expected to remain positive due to a host of factors such as economic expansion, increased government investment spending and private, rising commodity prices, the implementation of production-related incentive schemes and the surge in retail credit, according to a report by rating agency CareEdge.

The medium-term outlook looks promising with reduced corporate stress and a substantial reserve for loan provisions. The report says retail price inflation is also on the rise, which should help credit growth.

On the other hand, the rise in rates could, however, to some extent nullify the growth potential by dampening the demand for credit.

The retail lending segment is expected to perform well against the industrial and service segments, the rating agency said.

In absolute terms, outstanding bank credit would have been Rs 121.5 lakh crore as of June 17, 2022, increasing by Rs. 14.1 lakh crore over the past 12 months.

It was driven by a weak base effect, low cost loans and an increase in working capital loans due to higher inflation.

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In addition, bank credit would have seen a robust growth of 13.2% year-on-year, while increasing by 728 basis points or 7.28 percentage points.

Loans outstanding in the retail segment saw continued double-digit growth at 16.4% in May 2022, which could be attributed to growth in other personal loans, credit card receivables and loans. consumption, driven by the improvement in economic activities and employment. market.

Credit to the services sector also accelerated by 12.9% year-on-year in May 2022, compared to growth of 3.4% a year ago, due to a rise in non-banking financial companies, trade and shipping segments.


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