After the Reserve Bank of India announced that the asset quality of banks has shown significant improvement in the first half of FY24, market expert Porinju Veliyath took to X (formerly Twitter) to praise the central bank on achieving this extraordinary feat.
Experts believe that with liquidity becoming tighter and credit demand remaining strong, lending institutions are in the race to acquire the maximum deposits. SFBs are offering FD rates that are 75-100 basis points higher than those offered by PSBs and private banks.
LKP Securities estimates bank credit growth to be around 15% for FY24, around 400bps higher of India’s nominal GDP. Deposit growth is expected to be at 11% as the banks are raising the deposit rates.
The year FY23 was more bitter than sweet for banking stocks due to contagion fear and illiquidity crisis in the US and Europe. The start of FY24 has been positive in banking stocks with focus on corporate earnings season and comfort from robust credit growth.