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Credit growth spurs public lenders’ balance sheets to 10-year high in first half of FY23: RBI report

-The Hindu

‘Commercial banks may have to raise deposit rates more to meet a surge in credit demand; while banks have swiftly transmitted increases to lending rates, deposit rates have been laggards for most’

Under the backdrop of a highly uncertain global environment caused by globalisation of inflation, energy and food shortages, and synchronised tightening of monetary policy worldwide, the Indian economy was exhibiting signs of a gradual strengthening of the growth momentum, drawing from macroeconomic fundamentals, the Reserve Bank of India (RBI) said in the Report on Trends and Progress of Banking in India 2021-22.

Fuelled by robust credit demand in 2021-22 as also in 2022-23 so far, the consolidated balance sheets of scheduled commercial banks (SCBs) in India registered double-digit growth in 2021-22 after a gap of seven years, led by credit growth, which accelerated to a ten-year high in the first half of this financial year ending March 2023, the RBI said in the report.

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