Credit growth drops in June, credit offtake expanded by Rs. 20.4 lakh crore from last 12 months - World News Network

New Delhi [India], August 1 (ANI): The credit growth in June 2024 dropped sharply to 17.4 per cent lower than 20.8 per cent in the previous month, a report by Anandrathi observed.

But over the last twelve months, credit offtake expanded by Rs. 20.4 lakh crore while deposits expanded by Rs 23.9 lakh crore, the Care Edge noted in its report.
Citing the factors behind the decline, the report added that there has been a strong drop in demand deposits, while the growth of time deposits has also moderated during this period.
As per the report, the interbank liquidity was in deficit but improved from the last month of May due to the increased government spending.
The investment growth continued to moderate, staying below the average for six successive months. In June 2024, credit growth slowed across various sectors after a rise in May.
The industrial sector experienced slower growth, and credit to infrastructure dropped due to problems in power, telecommunications, and roads. The report has excluded infrastructure and services from the industrial sector.
The industrial sector excluding the infrastructure grew at the rate of 9.7 per cent while the rate dropped 0.1 per cent in June. The infrastructure grew at the rate of 7.2 per cent in May but it declined to 5.5 per cent in June.
In May, the growth rate of the services sector was 22.8 per cent which dropped to 17.4 per cent in June. The personal loan segment grew at the rate of 28.8 per cent in May, dropping to 25 per cent in the following month.
The same trend was observed in agriculture which saw a growth rate of 21.5 per cent in May but declined to 17.4 per cent in June.
It further added that personal loans in this period weakened, but the gold loans segment saw an increase because of high gold prices.
The Net interest margins (NIMs) on outstanding loans expanded slightly, with the Weighted Average Lending Rate (WALR) rising to 2.98 per cent from 2.94 per cent in May. However, NIMs on new loans decreased as lending rates fell.
Net interest margin (NIM) is the net interest income a lender earns from credit products like loans and mortgages, minus the interest it pays to holders of savings accounts and certificates of deposit (CDs).
Going ahead, the report expected that the NIMs will remain under pressure, but the liquidity situation may see an improvement because of the ongoing government spending and higher capital flows that could ease interbank liquidity stress. (ANI)

Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News