Rephrase the title:Outlook for bank credit offtake remains positive in 2024: CareEdge Ratings

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Kolkata, Outlook for bank credit offtake remains positive in 2024 while deposit growth is expected to improve, according to the latest research report of CareEdge Ratings. The report said that credit offtake continued to grow, increasing 20.3 per cent year-on-year to reach Rs 159.7 lakh crore for the fortnight ending January 12, 2024.

The rise was due to the impact of the merger of HDFC with HDFC Bank along with growth in personal loans.

If the impact of the merger is excluded, credit grew at a lower rate of 16.1 per cent year-on-year for the fortnight compared to last year’s growth of 16.5 per cent, the report said.

Deposits also grew 13.1 per cent year-on-year the fortnight (including the merged impact). The report said that deposit growth is expected to improve in 2024.

The outlook for credit offtake continues to remain positive in 2024 supported factors like economic expansion and continued push for retail credit supported increasing digitalisation, according to the report.

Unsecured personal loans and NBFC advances might witness a certain level of cooling off, the report said, adding that currently, capital levels are quite comfortable for banks and NBFCs.

Higher interest rates, inflation and global uncertainties regarding geo-political issues are other key factors which could weigh on credit growth, the report said.

The credit-deposit (CD) ratio has been generally hovering below 80 per cent since September 2023, the report said. The CD ratio saw an uptick of 44 basis points and stood at 79.9 per cent in the fortnight ending January 12, 2024, reaching a three-year high.

Deposits have seen relatively steady performance since the COVID times, the report said. However, in recent years, credit growth has been significantly outperforming deposit growth, it said.

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