Deposit Growth Outpaces Credit Offtake Against December 2023: CareEdge Analysis

CareEdge Research Report

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

• Credit offtake increased by 6.8% compared to December 2023, reaching Rs 170.5 lakh crore as of September 6, 2024. Personal loans and MSMEs account for the majority of this growth. Meanwhile, sequential credit growth was 0.6%. This slowdown can be attributed to RBI measures, including higher risk weights on unsecured loans and the impact of a higher base effect. Additionally, the proposed LCR norms may present challenges to bank credit growth in the coming months.

• Deposits rose at 7.3% compared to December 2023 and reached 215.5 lakhs crore as of reported Sep 6, 2024, driven by growth in time deposits. Sequentially deposits increased by 1.1%.

The Short-term Weighted Average Call Rate has remained the same at 6.54% as of September 13, 2024, compared to 6.71 as of September 15, 2023.

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