Deposit Growth Keeps Pace With Credit Offtake Against Dec 2023: CareEdge

CareEdge Research Report

• Credit growth is trending down and continues to converge with deposit growth on an annual basis. Meanwhile, if we study the growth rate compared with December 2023, deposits have kept pace credit offtake.

Credit offtake increased by 6.2% compared to December 2023, to reach Rs. 169.5 lakh crore as of Aug 23, 2024. Personal loans and MSMEs accounted for the bulk of this increase, with large corporate credit also contributing to the same. Meanwhile, sequentially credit saw a growth of 0.4%. This slowdown can be attributed to RBI measures around higher risk weights on unsecured loans and a higher base effect also by proposed LCR norms bank credit growth could face challenges in coming months.

Deposits rose at 6.2% compared to December 2023 and reached Rs 213.2 lakhs crore as of Aug 23, 2024, driven by growth in time deposits. Sequentially deposits fell marginally by 0.02%.

• The Short-term Weighted Average Call Rate (WACR) has narrowed to 6.50% as of August 23, 2024, compared to 6.75% as of August 25, 2023.

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