Credit offtake in elevated levels: CARE Ratings

Chennai: The credit offtake in India remained at elevated levels of 17.5 per cent year-on-year (YoY), reporting robust growth for the fortnight ended December 2, said credit rating agency CARE Ratings.
According to CARE Ratings report, the growth is driven by a low base, non-banking finance companies (NBFC), retail credit, higher working capital demand driven by inflation and improvement in capacity utilisation ratio, and rising demand for fresh capex.
The benefit of a lower base is expected to ease in the next few fortnights, optically leading to lower growth rates, CARE Ratings said.
Also Read Financial literacy poor across urban, rural population in country: RBI survey With a large base, deposits saw a slower growth at 9.9 per cent y-o-y compared to credit growth of 17.5 per cent for the fortnight ended December 2.
The credit offtake expanded by over 1,000 bps due to a low base, retail credit, inflation-led working capital requirement and MSMEs. It also increased sequentially by 1.2 per cent from the immediate fortnight (ended November 18), CARE Ratings said.
Deposits rates are expected to go up further due to rising policy rates driven by higher inflation, intense competition between banks for sourcing deposits to meet strong credit demand, widening credit deposit gap, and lower liquidity in the market, said CARE Ratings.