ICRA Upgrades FY24 Bank Credit Growth Forecast to 15%: Record Incremental Growth Anticipated

In a positive turn, ICRA has revised its bank credit growth estimates for FY24 upwards to 14.9-15.3%, surpassing the previous projection of 12.8-13.0%. The surge is attributed to robust performance in the retail segment and non-banking finance companies (NBFCs), according to Anil Gupta, Senior Vice President at ICRA.

ICRA’s FY24 Bank Credit Growth Forecast: Key Points

1. Strong Retail and NBFC Performance: Gupta highlights the strength in retail credit and bank lending to NBFCs during the first nine months of December 2023, prompting a notable revision in projections.
2. Record Incremental Credit Growth: The incremental credit is expected to reach Rs 20.4-20.9 trillion, marking the highest ever in bank credit growth, surpassing the previous high of Rs 18.2 trillion in FY23.
3. Corporate Bond Issuances: ICRA anticipates corporate bond issuances to reach Rs 9.6-9.9 trillion in FY24, surpassing the previous record of Rs 8.7 trillion in FY23.
4. Concerns for FY25: Despite the optimistic outlook, challenges in deposit mobilization could temper bank credit expansion to 11.7-12.6% in the next financial year (FY25). Weaker export demand, softer commodity prices, and deposit challenges are identified as potential hurdles.

5. Record Incremental Deposit Mobilization: ICRA predicts a record incremental deposit mobilization in FY24 at Rs 21.7-22.3 trillion, acknowledging the challenge for banks to sustain deposit growth relative to credit expansion.

Important Questions Related to Exams

1. What is ICRA’s revised bank credit growth estimate for FY24?
2. According to Anil Gupta, what factors led to the upward revision of bank credit growth projections?
3. What is the anticipated incremental credit growth for FY24, and how does it compare to the previous fiscal year?
4. What is ICRA’s projection for corporate bond issuances in FY2024?
5. What challenges does ICRA foresee for bank credit expansion in FY25?
6. How much is the record incremental deposit mobilization predicted by ICRA for FY2024?

Kindly share your responses in the comment section!!