Bank credit growth moderates to 14.9% on higher base effect

The bank advances rose to ₹133.04 lakh core in the 15-day period ended on December 30, 2022 from ₹115.82 lakh crore in the fortnight ended on December 31, 2021, according to Reserve Bank’s latest data.

In the previous fortnight ended December 16, 2022, bank credit grew by 17.4 per cent. Since August 2022, bank credit has been growing upwards of 15 per cent. In the fortnight ended July 29, 2022, credit growth stood at 14.5 per cent.

According to a report by Crisil Ratings, higher growth in bank credit seen during the first half of fiscal 2023 is likely to moderate in the second half. “While credit growth in fiscal 2023-to-date has printed higher, the second half should see this moderate somewhat and touch around 15 per cent levels for the full fiscal given the base effect of rapid growth in the second half of fiscal 2022. In fact, in fiscal 2022, over 90 per cent of the incremental credit was added in the second half of the year,” Crisil had said in a report released in November last year.

In October 2022, credit offtake rose to a decade high of 17.9 per cent on year-on-year basis, driven mainly by retail credit, higher working capital demand amidst high inflation and lower funds raised in the capital market.