Credit Offtake Rises, Credit-Deposit Ratio Stays Elevated Around 80%: CareEdge

CareEdge Research Report

Credit offtake continued to grow, increasing by 20.3% YoY to reach Rs. 161.5 lakh crore, for the fortnight ending February 9, 2024. This rise was due to the impact of HDFC’s merger with HDFC Bank Ltd. along with the growth in personal loans. If we exclude the impact of the merger, credit grew at a lower rate of 16.3% YoY for the fortnight compared to last year’s growth of 16.0%. The outlook for bank credit offtake continues to remain positive.

Deposits too grew by 13.6% YoY for the fortnight (including the merger impact) and reached Rs. 202.0 lakh crore as on February 9, 2024. Excluding the merger impact, growth stood at 13.0%. Sequentially we saw an increase of 0.7%, driven by growth in time deposits. Deposit growth is expected to improve compared to earlier periods as banks look to shore up their liability franchise and ensure that deposit growth does not constrain the credit offtake.

The short-term weighted average call rate stood at 6.71% as of February 16, 2024, compared to 6.36% on February 17, 2023, due to liquidity and pressure on short-term rates.

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