SME Editorial
Bank lending to the private corporate sector grew 14.9 per cent in September 2023 from 14.7 per cent a year ago, according to the Reserve Bank data released Friday. Another set of banking data released by the central bank showed the share of term deposits bearing a 6 to 8 per cent interest rate rose to 78.6 per cent in September 2023 against 12.5 per cent in March 2022.
According to data on outstanding credit of banks at September-end 2023, loans to industry accounted for nearly one-fourth of total bank credit; they increased by 8.6 per cent (year-on-year) in September 2023 (against 12.3 per cent a year ago); working capital loans growth has remained in double digits for the last six quarters.
“Bank lending to the private corporate sector recorded robust growth and accelerated to 14.9 per cent (year-on-year) in September 2023 from 11.5 per cent a quarter ago and 14.7 per cent a year ago,” the RBI said.
The share of personal loans in bank credit has successively increased to over 30 per cent from 22 per cent share five years ago, it said, adding that the share of female borrowers in total bank credit as well as in loans to individuals has been rising in the recent period.
Private sector banks continued to record faster credit growth compared to public sector banks.
Data on deposits with banks at September-end 2023 showed rising interest rates led to a further shift to deposits with higher yield.
“…the share of term deposits bearing less than 6 per cent interest rate came down from 85.7 per cent in March 2022 to 38.7 per cent in March 2023 and 16.7 per cent in September 2023,” it said.
The RBI further said higher returns led to term deposit mobilisation, outpacing the accretion to current and savings deposits.
Term deposits accounted for over 89 per cent of the incremental deposits during Q2 2022-23.
“As a result, the share of term deposits in total deposits rose to nearly 60 per cent in September 2023 from 57 per cent in March 2023 (55 per cent in March 2022),” the central bank said.
On an incremental basis, 71.3 per cent of term deposits accrued under the original maturity period of ‘1 year to less than 3 years’ during the latest quarter.
Private-sector banks continued to outpace public-sector banks in deposit mobilisation.
Also, nearly 44 per cent of the term deposits in September 2023 were of the size Rs 1 crore and above; on an incremental basis, they accounted for over half of the term deposits during the first half of 2023-24.
