The pace of growth in non-food credit grew by 13.8% on year in the fortnight ended July 1, as per data released by the Reserve Bank of India (RBI), sustaining double-digit growth for three fortnights in a row. The non-food credit has clocked more than 10% growth in each fortnight of the first quarter of the current financial year, except for the fortnight ended May 20.
Outstanding non-food credit as on July 1 stood at Rs 120.99 trillion, higher than Rs 108.45 trillion in the same fortnight a year ago. Deposit growth, which had moderated in the previous fortnight ended June 17, also grew 9.77% on year to Rs 169.6 trillion.
Among the recently reported loan growth data by some private banks for Q1FY23, HDFC Bank posted a 21.5% on year growth in advances to Rs 13.95 trillion as on June 30, 2022. Other banks such as Federal Bank, IndusInd Bank, CSB Bank and AU Small Finance Bank (SFB) reported double-digit loan growth during the quarter.
Top private sector banks such as ICICI Bank, HDFC Bank and Axis Bank maintained strong mortgage disbursements, brokerage Emkay Global Financial Services said in a report. Armed with cost advantage and improved turnaround time, banks have gained market share in home loans as State Bank of India (SBI), other public sector banks are also trying to bolster home loans, it said. Although overall credit growth remains healthy, led by retail, analysts believe that large private banks will be better placed to capture retail growth momentum due to better technology.
On the corporate side, companies are ready to borrow from banks after undergoing deleveraging over the past few years as recovery in economic activity and increased investments and consumption may sustain the momentum, ICICI Securities had said earlier.
Although Q1FY23 has seen robust growth in credit, analysts at Kotak Institutional Equities said that the growth has not been evenly spread out across segments as loan growth is led by the metropolitan area, rising from a lower base.