Indian banks are anticipated to obtain a credit growth of 12.5 per cent in the monetary 12 months 2025, in accordance to a report by HSBC Securities and Capital Markets (India) Private Limited revealed on Friday.
However, the report additionally cautioned {that a} slowdown in GDP growth may pose dangers, preserving credit enlargement range-bound in 2024-25.
The report additional highlighted a number of challenges, “Multiple headwinds like tight liquidity conditions, muted growth in deposits, GDP slowdown and high loan-to-deposit ratio remain key risks to credit growth.”
Despite these issues, the retail mortgage sector confirmed constructive momentum in November 2024, pushed by robust demand for unsecured private loans, regular growth in house and gold loans, and a few restoration in credit prolonged to non-banking monetary corporations (NBFCs).
Non-food credit grew by 12.2 per cent year-on-year in November 2024, in contrast to 12 per cent in October, with month-on-month growth bettering to 1.3 per cent from 0.7 per cent.
Retail loans elevated by 13.3 per cent year-on-year and 1.5 per cent month-on-month, whereas loans to micro, small, and medium enterprises (MSMEs) rose by 13.8 per cent year-on-year and 0.7 per cent month-on-month.
Corporate loans additionally noticed an increase of 9.6 per cent year-on-year and 1.5 per cent month-on-month.
The report pointed to broad-based growth in most retail mortgage segments. Home loans expanded by 12.2 per cent year-on-year and 1.3 per cent month-on-month in November, up from 0.9 per cent growth in October. Demand for residential housing is anticipated to preserve this section secure.
Gold loans recorded important growth, rising by 6.7 per cent month-on-month, contributing to 12 per cent of incremental retail loans in November.
The report famous, “In our view, slowdown in microfinance loans has increased the demand for gold loans as an alternate source of borrowings.”
On the opposite hand, car loans declined by 1.8 per cent month-on-month, reflecting subdued car gross sales.
Credit card receivables grew by 18.1 per cent year-on-year in November, up from 16.9 per cent in October.
However, receivables growth is greater than growth in spending by way of credit playing cards.
