The banking sector's credit growth rate will drop to the bottom of 58 years

At the end of the current financial year

Mumbai, Ta. 27 December 2019, Friday

The credit growth rate in the banking sector, which stood at 5.9 percent in FY'08, is expected to fall to around 8 to 5 percent at the end of the current fiscal year. The rate will be the lowest in the last 6 years, according to a report by rating agency ICRA. Apart from the downturn in the Indian economy, the growth rate of loans has been slowing down due to the low requirement of working capital by companies. Lenders are also taking precautions to release loans.

As of December 1, the growth in bank credit stood at more than Rs. 5 crore, while banks had increased by Rs. 5 trillion by the end of Fiscal Year 1 and Rs.

Bankers are saying there is little demand for corporate credit when private investment is almost stuck. Bank borrowings say the current fiscal is likely to see an increase in credit demand for the rest of the year, but the slowdown seen at the beginning of the year is difficult to recoup.

According to the Iraqi assessment of 2 scheduled commercial banks, the credit growth rate as of September 1 has been 5.5 percent. However, in public sector banks, the figure is only 8.5%. In private banks, the figure is 5%.

Private investment and consumption have had an impact in the context of slow economic growth. Due to this, credit growth has declined in the current fiscal year. However, the situation is expected to improve from July 1 to September, an analyst said. NBFCs and HFCs were the main reason for the credit growth to remain high in FY'10. Companies in the sector had approached banks to meet their financial needs.