Credit Growth Slowdown Looms Over Banking Sector Amid Regulatory Tightening
Icra projects a slowdown in credit growth for banks and NBFCs due to regulatory measures and tighter funding conditions. Incremental bank credit growth is expected to decelerate to Rs 19-20.5 lakh crore in 2024-25. Unsecured lending segments like microfinance face rising delinquencies amid funding constraints.
- Country:
- India
Icra anticipates a significant slowdown in credit growth for banks and non-bank financial companies (NBFCs) due to regulatory measures and stricter funding conditions in domestic markets.
The agency estimates that incremental bank credit growth will decelerate to Rs 19-20.5 lakh crore in 2024-25, marking a 12% Year-on-Year growth, compared to the 16.3% increase seen in the previous fiscal year.
NBFCs are expected to experience a stark decline in asset growth to 16-18% this fiscal year from 25% in 2023-24, with high lending rate segments like microfinance already showing rising delinquencies.
(With inputs from agencies.)
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