look news india
Mumbai: Banks' loan growth is estimated to be 15.40 per cent in the current financial year. The growth of unsecured and NBFC loans has slowed down in the last few months after the Reserve Bank increased the risk weight of unsecured loans and loans to non-banking finance companies (NBFCs) in November last year.
A report by the rating agency said that loan demand from the agriculture sector would remain almost stable in the current year given the normal monsoon, while increased capital expenditure by the private sector would boost loan demand.
Non-food bank credit grew 16.20 per cent year-on-year to Rs 162.30 lakh crore at the end of May.
Credit growth to the industry sector, which was up to 16.40 per cent in October 2022, declined to 5.20 per cent in July 2023, but has risen to 8.90 per cent in May of the current year. There has been an increase in the demand for loans by large industries. Bank credit to industries stood at Rs 36.87 lakh crore at the end of May.
The report said that the loan demand from micro and medium enterprises is still quite high.
The gross non-performing asset (NPA) ratio of the country's scheduled commercial banks fell to a multi-year low of 2.80 per cent at the end of the financial year 2023-24, while the net NPA ratio fell to 0.60 per cent. The Reserve Bank of India (RBI) Financial Stability Report states that a low NPA ratio creates favorable conditions for banks to lend.