Bank Lending To Private Corporate Rises 14.9% In September: RBI Data

Bank lending to the private corporate sector grew 14.9% in September 2023 from 14.7% a year ago, according to the Reserve Bank data released Friday.

Another set of banking data released by the central bank showed the share of term deposits bearing a 6 to 8% interest rate rose to 78.6% in September 2023 against 12.5% in March 2022.

According to data on outstanding credit of banks at September-end 2023, loans to industry accounted for nearly one-fourth of total bank credit; they increased by 8.6% (year-on-year) in September 2023 (against 12.3% a year ago); working capital loans growth has remained in double digits for the last six quarters.

"'Bank lending to the private corporate sector recorded robust growth and accelerated to 14.9% (year-on-year) in September 2023 from 11.5% a quarter ago and 14.7% a year ago," the RBI said.

The share of personal loans in bank credit has successively increased to over 30% from 22% share five years ago, it said, adding that the share of female borrowers in total bank credit as well as in loans to individuals has been rising in the recent period.

Private sector banks continued to record faster credit growth compared to public sector banks.

Data on deposits with banks at September-end 2023 showed rising interest rates led to a further shift to deposits with higher yield.

"...the share of term deposits bearing less than 6% interest rate came down from 85.7% in March 2022 to 38.7% in March 2023 and 16.7% in September 2023," it said.

The RBI further said higher returns led to term deposit mobilisation, outpacing the accretion to current and savings deposits.

Term deposits accounted for over 89% of the incremental deposits during Q2 2022-23.

"As a result, the share of term deposits in total deposits rose to nearly 60% in September 2023 from 57% in March 2023 (55% in March 2022)," the central bank said.

On an incremental basis, 71.3% of term deposits accrued under the original maturity period of "1 year to less than 3 years" during the latest quarter.

Private-sector banks continued to outpace public-sector banks in deposit mobilisation.

Also, nearly 44% of the term deposits in September 2023 were of the size Rs 1 crore and above; on an incremental basis, they accounted for over half of the term deposits during the first half of 2023-24.