RBI data shows a 14.9% increase in bank lending to private firms in September

 RBI data shows a 14.9% increase in bank lending to private firms in September

RBI data shows a 14.9% increase in bank lending to private firms in September

Within the previous quarter, fixed deposits with an initial maturity length of '1 year to less than 3 years' gained 71.3% on an incremental basis.

In terms of deposit growth, private sector banks continued to outperform public sector banks.

According to Reserve Bank statistics issued on Friday, bank lending to the private business sector increased by 14.9% in September 2023 compared to 14.7% in the same month the previous year. The percentage of fixed deposits with 6 to 8 percent interest rates rose from 12.5 percent in March 2022 to 78.6 percent in September 2023, according to another set of banking statistics that the central bank disclosed.

Industry credit accounted for approximately 25% of total bank credit as of the end of September 2023, in accordance with data on outstanding credit to banks. Working capital credit growth has been double digits for the last six quarters, with an increase of 8.6% year over year in September 2023 compared to 12.3% year earlier. "Bank credit to the private corporate sector exhibited strong growth and increased to 14.9 per cent (year-on-year) in September 2023 form 11.5 per cent a quarter ago and 14.7 per cent a year ago," according to the RBI.

According to the report, women now make up a larger portion of borrowers in both total bank credit and individual loans, with personal loans accounting for over 30% of bank credit, up from 22% five years ago. recent timespan. Compared to public sector banks, private sector banks have continued to record greater lending growth. Data on bank deposits as of the end of September 2023 indicated that a move toward higher-yielding accounts was caused by increasing interest rates. "...the share of fixed deposits with interest rates above 6 per cent declined about 85.7 per cent in March 2022 to 38.7 per cent in March 2023 as well as 16.7 per cent in September 2023," stated the report.

The RBI went on to say that greater yields encouraged fixed deposit mobilization, which in turn increased current and savings deposits. In Q2 2022–2023, fixed deposits made up more than 89% of all additional deposits. "As a result, the share of term deposits all around deposits climbed from 57 per cent in March 2023 (55 per cent in March 2022) to nearly 60 per cent in September 2023," the bank said.

Within the previous quarter, fixed deposits with an initial maturity length of '1 year to less than 3 years' gained 71.3% on an incremental basis. In terms of deposit growth, private sector banks continued to outperform public sector banks. Additionally, around 44% of fixed deposits in September 2023 had a value of Rs 1 crore or more; cumulatively, these accounts made up over 50% of fixed deposits in the first half of 2023–2024.