Consumer credit of NBFCs is expected to decline from Rs 22 lakh crore in FY2024 to Rs 19 to Rs 20.5 lakh crore in FY2025.
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| (Photo - IDFC First bank) Rating agency ICRA on Wednesday downgraded its outlook for Indian banks to stable from positive for FY 2024-25. It is estimated that there may be a decline in credit growth and profitability of banks. The overall condition of the area is expected to remain better. Sachin Sachdeva, vice-president and sector head, ICRA, said “Growth in consumer credit could slow down due to difficulties in mobilizing deposits and regulatory measures. Consumer credit of non-banking finance companies (NBFCs) is expected to decline from Rs 22 lakh crore in FY 2024 to Rs 19 to 20.5 lakh crore in FY 2025. ICRA said that “compared to a year ago, the growth in fiscal year 2025 is likely to slow down from 16.3 percent to 11.7 to 12.5 percent. The decline in banking sector interest margins over the past 18 months is due to rising deposit costs and expectations of rate cuts in the second half of FY25 may put pressure on margins.” ICRA said, “loan account growth is expected to generate good income which will be sufficient for most banks to meet their regulatory and development capital requirements.” ICRA said, “The credit deposit ratio (CD ratio) for banks excluding the merger of HDFC and HDFC Bank is estimated to increase to 78 per cent by March 22, 2024. This ratio is the highest since 77.9 percent on December 21, 2018 and higher than 75.7 percent on March 24 last year.” |