Outlook for non-food industry credit growth over next six months is optimistic: FICCI-IBA survey
This could be attributable to the government’s capital expenditure push for the infrastructure sector
Detail
A survey conducted by industry body FICCI and Indian Banks’ Association (IBA) (FICCI-IBA) has suggested that the outlook for non-food industry credit growth over the next six months is optimistic with 62 per cent of the participating banks expecting non-food industry credit growth to be above 12 per cent. The nineteenth round of the FICCI-IBA survey was carried out for the period January to June 2024.
A total of 22 banks including public sector, private sector and foreign banks participated in the survey. These banks together represent about 67 per cent of the banking industry, as classified by asset size. The survey found the Indian economy and the banking sector remain robust and resilient. With improved balance sheets, banks are supporting economic activity through sustained credit expansion. However, credit growth is outpacing deposit growth, which could lead to liquidity challenges for the banking system.
The survey said raising deposits to keep pace with the loan growth and keeping the credit cost low remains on the top of banks’ agenda. The survey findings show that long-term credit demand has seen continued growth for sectors such as Infrastructure, metals, iron and steel, engineering. Infrastructure is witnessing an increase in credit flow with 77 per cent of the respondents indicating an increase in long-term loans. This could be attributable to the government’s capital expenditure push for the infrastructure sector.