Lending by Indian banks increased by 7.9% in the two weeks to February 25, 25 compared to a year ago, according to a weekly statistical supplement released by the Reserve Bank of India (RBI).
Deposits over the same period rose 8.6%, the Reserve Bank’s report showed on Friday. Bank deposits increased ₹89,297 crore to ₹162.17 lakh crore during the reporting period.
Outstanding loans increased ₹82,047 crore ($10.74 billion) to ₹116.27 lakh crore in the two weeks to February 25.
At the same time, non-food credit increased by ₹91,803 crore to ₹115.59 lakh crore, while food credit plummeted ₹9,756 crore to ₹68,224 crores.
Recently, Fitch Ratings said in a report that the strengthening economic recovery and stable financial metrics will help state-owned banks have stable earnings over the next fiscal year, helped by the gradual unwinding of regulatory forbearance throughout the year. the year.
The rating agency also said that private sector banks are better positioned to reap the benefits of the recovery and will continue to increase their market share in both credit and deposits.
Noting that regulatory forbearance has removed immediate capital requirements from public banks by postponing the recognition of distressed loans, the report says private banks are also the most competitive on this front.
The report expects bank earnings and profitability to recover in the next fiscal year on the back of lower loan impairment charges which improved to 1.2% in the first half of FY22, vs. 1.7% a year ago, as forbearance will limit further loan writedowns.
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