Credit Growth remains Strong in the Fortnight, CD ratio Stays above 75 per cent
Key Highlights:
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Credit offtake rose by 15.4% year on year (y-o-y) to Rs.138.9 lakh crore for the fortnight ending May 19, 2023. The growth has continued to be driven by credit to NBFCs, personal loans, and working capital lending to corporates.
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Deposits witnessed a slower growth at 10.9% y-o-y compared to credit for the fortnight ended May 19, 2023. The short-term Weighted Average Call Rate (WACR) has reached 6.21% (as of May 19, 2023) from 3.58% as of May 20, 2022, due to a rise in policy rates and tightening of liquidity in the system resulting in banks using their excess SLR investments to fund credit growth. Although, WACR has dropped from 6.69% as of May 04, 2023 due to a liquidity surplus available in the banking system over a couple of months. The liquidity surplus stood at Rs.0.5 Lakh crore as of May 19, 2023 as compared to Rs.3.21 lakh crore as of May 20, 2022.
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As a result of the above, the Credit to Deposit (C/D) ratio increased by 300 bps y-o-y to 75.6% in the fortnight from May 20, 2022, due to faster growth in credit as compared to deposits.
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