Bank's Sectoral Credit Deployment - Growth Sustains Momentum Across Verticals In November: ICICI Securities

ICICI Securities Report

Banks’ sectoral credit deployment data for November 2023 (as of November 17, 2023) records non-food credit at Rs 155.8 trillion. Adjusted for the merger (of a non-bank with a bank), systemic non-food credit stands at Rs 150 trillion, up ~16.3% YoY/9.8% year to date.

Headline non-food credit growth remains strong, accelerating to 16.3% YoY in November 2023 with improvement across all four sub-segments. On month-on-month basis, growth in banks’ credit to non-banking financial company (up 1.2%) and other personal loans (up 0.8%) is positive.

However, we highlight that since the segmental data is dated November 17, 2023, just a day after the Reserve Bank of India higher risk weights mandate, the full impact is yet to be seen.

We believe the industry’s revival, especially large industry (current growth at less then 4% YoY), is critical for non-food credit growth to sustain, as retail/services may see some dampening due to the RBI recent actions.

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