The BFSI sector recorded steady credit growth with an increase in overall outstanding loans by approximately 11 per cent on a year-on-year basis in December 2024 which is same as the year-on-year credit growth depicted in November of 2024. Deposit growth stands at 10 per cent year-on-year, and a dip of 1 per cent from the previous month.
The outstanding loans across scheduled banks witnessed a dip of 1 per cent month-on-month and a 10 per cent year-on-year increase, totalling Rs 177.4 trillion in December 2024. This compares with Rs 179.6 trillion in November, Rs 174.4 trillion in October, and Rs 172.9 trillion in September.
In November 2024, outstanding loans across scheduled banks grew by 11 per cent year-on-year, reaching Rs 179.6 trillion, with a 0.8 per cent month-on-month rise. Deposits also climbed by 11 per cent YoY to Rs 224.7 trillion. Non-cash retail transactions saw a 9.6 per cent YoY increase.
The Reserve Bank of India’s financial stability report underscored the notable credit expansion across both public and private sector banks.
Outstanding loans in scheduled banks were growing at a higher pace than deposits, currently showed stagnation. Deposits across scheduled banks recorded approximately 10 per cent year-on-year growth in December. However, on a month-on-month basis, deposits decreased to Rs 220.6 trillion in December from Rs 224.7 trillion in November, compared to Rs 220.4 trillion in October.
In the past two years, aggregate deposit growth saw moderation, especially during 2021-22. However, a report by the State Bank of India highlighted that between FY14 and FY23, banking credit surged from Rs 60 trillion to Rs 138 trillion, a 2.3 times increase, while deposits rose 2.4 times from Rs 77 trillion to Rs 187 trillion.
In October 2024, outstanding loans across scheduled banks grew by 12 per cent year-on-year, reaching Rs 174.4 trillion, with a 0.8 per cent month-on-month rise. Deposits also climbed by 12 per cent YoY to Rs 220.4 trillion. Non-cash retail transactions saw a significant 26.3% YoY increase.
Growth in non-cash retail transactions
The 1Lattice data indicated a 15.1 per cent year-on-year increase in December 2024 for non-cash retail transactions. In December, it reached Rs 79.1 trillion, and in November, this was Rs 71.9 trillion.
The National Electronic Funds Transfer (NEFT) mode dominated non-cash transactions, accounting for 48.1 per cent, followed by Unified Payments Interface (UPI) at 29.3 per cent.
India’s personal loan market slows, with 13.8 per cent YoY growth in H1 of FY25. NBFCs dominate with 68.7 per cent share of active loans, while public sector banks hold 37.8 per cent of portfolio outstanding. Loan origination value dips 5.5 per cent, but volume rises 3.4 per cent to 691.5 lakh loans, amid rising delinquencies across all geographies.
NEFT recorded Rs 38.1 trillion worth of transactions, followed by UPI with Rs 23.2 trillion transactions, Cheque Truncation System (CTS) with Rs 5.9 trillion worth of transactions and credit and debit cards with Rs 1 and Rs 0.4 trillion respectively in December 2024, the data added.
Leave a Reply