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Bank credit is likely to expand by 13 per cent in the current financial year, up from 11.5 per cent in FY22, as economic activity normalises post Covid-19 pandemic and on high nominal GDP growth, Fitch Ratings said in a report on Monday.
The rating agency has forecast India’s real GDP growth at 7 per cent in FY23. It said the growth in bank credit in the fiscal ending March 2023 will be seen despite the effects of higher interest rates, the agency said. However, the full-year loan growth will represent a modest slowdown from the 17 per cent year-on-year (y-o-y) pace in the first half of FY23.
“Strong loan growth should benefit net revenue, particularly as it will be coupled with wider net interest margins,” the report said.
For FY24, the agency expects credit demand to stay robust.
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