Chennai, Feb 14 (IANS) Driven by retail credit demand, growth in non-banking finance companies (NBFC) and inflation-induced working capital requirement from sectors such as petroleum, coal products and nuclear fuels, and chemicals and chemical products, credit offtake rose by 16.3 per cent for the fortnight ended January 27, said CARE Ratings.
In a research report, CARE Ratings said the credit offtake rose by 16.3 per cent year on year (y-o-y) for the fortnight ended January 27.
Incremental credit growth has risen by 12.2 per cent so far in FY23. In absolute terms, credit expanded by Rs 14.5 lakh crore from March 2022, the report said.
According to CARE Ratings, with a higher base, deposits witnessed a slower growth at 10.5 per cent y-o-y compared to credit growth for the fortnight ended January 27.
Deposit rates have already risen and are expected to go up even further due to rising policy rates, intense competition between banks for raising deposits to meet strong credit demand, a widening gap between credit and deposit growth, and lower liquidity in the market, the report notes.
The deposit rates rise with a lag effect and are expected to increase the cost of borrowings for the banks, said the report.
–IANS
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