Bank credit growth: Despite looming challenges such as elevated interest rates and global uncertainties, FY24 witnessed a remarkable credit-off take, projected to close at a growth rate of approximately 16 per cent, excluding merger effects. CareEdge's estimations indicate a moderation in credit growth to a range of 14 per cent-14.5 per cent by the close of FY25, with the impact of the HDFC merger expected to dissipate by Q1FY25.

Bank credit in FY24 surged ahead, surpassing deposit growth by a significant margin. Leading the charge were personal loans and Non-Banking Financial Companies (NBFCs), while industrial sector growth remained subdued. The private sector banks continued their dominance over public sector counterparts, underscoring their agility in navigating market dynamics.

The impetus behind the credit boom primarily stemmed from personal loans, riding on the tide of enhanced digitalization. Noteworthy contributions from NBFCs have reshaped India's banking sector performance, marking a notable shift in trajectory. Throughout the fiscal year, credit growth consistently outpaced deposit growth, with innovative financing avenues like Certificates of Deposits and refinance mechanisms from institutions like SIDBI, NABARD, and NHB bridging the funding gap.

While corporate lending faced headwinds due to Non-Performing Assets (NPAs) and deleveraging, personal loans emerged as the beacon of growth. January 2024 witnessed a staggering year-on-year growth of 31.8 per cent in the personal loan segment, propelled by various sub-segments such as unsecured loans, vehicle, and home loans. This upward trajectory is anticipated to persist, buoyed by advancing digitalization efforts, streamlined credit decision-making processes and the burgeoning e-commerce landscape facilitating convenient credit access.

In essence, the personal loans segment stands at the forefront of banking sector growth, poised for sustained expansion fueled by evolving consumer behaviours and industry-wide innovation endeavours