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Bankers continue to remain positive on loan demand during the last quarter of the current fiscal and the first half of fiscal 2023-24 across all the major categories of borrowers.
“Bankers are highly optimistic of credit demand across all the main sectors in the coming quarters, viz., Q4:2022-23 to Q2:2023-24,” an article published in the Reserve Bank of India’s February Bulletin showed. Lenders also expect easier terms and conditions for loans, going forward, it said.
During the first nine months of fiscal 2022-23, non-food credit grew at 11.9 per cent to Rs 133.04 lakh crore from Rs 118.91 lakh crore as at end-March 2022.
Bank of Baroda in a recent report said it expects the bank credit to be around 14-15 per cent in FY23. A Bank Lending Survey for third quarter of 2022-23, released earlier this month by the Reserve Bank of India (RBI), showed that bankers’ net response on loan demand for all sectors in Q4 FY23 stood at 43.3 per cent.
Net response is computed as the difference of percentage of banks reporting increase/optimism and those reporting decrease/pessimism in respective parameters. It ranges between -100 to 100. Any value greater than zero indicates expansion or optimism and value less than zero indicates contraction or pessimism.
In the Q4 FY2023, the maximum demand for loan will come from the services sector (net response : 46.7 per cent) followed by infrastructure, manufacturing and agriculture (net response : 41.7 per cent each).
The net response for demand for personal loans in Q4 stood at 38.9 per cent, the survey showed.
The survey further showed that the net response on loan demand for all sectors is 46.4 per cent in Q1 FY2024 and 48.2 per cent in Q2 FY2024. The bankers’ net response for demand in loans from the infrastructure sector is 37.5 per cent in Q1 and 44.6 per cent in Q2.
The Union Budget’s announcement of a capital expenditure of Rs 10 lakh crore in 2023-24 will boost the demand for loans from infrastructure and its related sectors such as cement and steel, a banker said.
