BFSI Sector Shows Strong Credit Growth and Robust Non-Cash Transactions in February 2024

In February 2024, the Banking, Financial Services, and Insurance (BFSI) sector in India witnessed robust credit growth and a surge in non-cash retail transactions, according to recent data from 1Lattice and reports by the Reserve Bank of India (RBI) and State Bank of India (SBI).

The outstanding loans across scheduled banks experienced a significant increase of approximately 16 per cent year-on-year (yoy), reaching Rs 161.1 trillion compared to Rs 159.2 trillion in January 2024 and Rs 158.1 trillion in December 2023. The RBI’s financial stability report highlighted this remarkable credit expansion, driven by both public sector and private banks.

Credit growth soared by 15.4 per cent, with personal loans showing a substantial 22.2 per cent yoy growth across all major segments.

On the deposit front, there was a notable 12 per cent yoy increase, reaching Rs 205.4 trillion in February 2024. Despite a slight month-on-month decline of 0.7 per cent, deposits remained strong.

The State Bank of India’s report revealed impressive growth in banking credit from Rs 60 trillion to Rs 138 trillion between FY14 and FY23, alongside a surge in deposits from Rs 77 trillion to Rs 187 trillion during the same period.

Additionally, non-cash retail transactions saw a remarkable 28 per cent yoy spike, totaling Rs 69.7 trillion in February 2024. Notably, National Electronic Funds Transfer (NEFT) dominated the mode of payment with Rs 34.7 trillion transactions, followed by Unified Payments Interface (UPI) with Rs 18.3 trillion transactions, and Check Truncation System (CTS) with Rs 6 trillion transactions. Credit and debit cards each accounted for Rs 0.4 trillion transactions.

Overall, the BFSI sector continues to demonstrate resilience and growth, fueled by increased lending activities and a surge in digital payments, reflecting evolving consumer preferences and industry dynamics.