bullish
Rampant Credit Growth Drives Recovery in Indian Banks Despite Lagging Deposit Growth
324 Views03 Jun 2024 09:57
SUMMARY
- Indian credit markets have been growing rapidly, with banks and non-bank financial institutions increasingly lending and servicing retail clients to meet the growing demand for retail loans from a population that has recovered strongly post Covid-19 pandemic.
- Indian financial institutions are filling the retail financing gap so fast that the Reserve Bank of India (RBI), India’s central bank, has had to introduce new regulation to maintain financial stability in the Indian banking system. However, improvement in underlying fundamentals and roaring capital markets are driving large increases in bank balance sheets and valuations respectively.
- Criat’s Credit Cycle Index (Criat CCI) for Indian banks has steadily improved more than 15bps since the middle of 2023, as the NIFTY Bank index reached new highs of INR 49,000.
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