Revitalized Indian Banks: Quality Assets and Soaring Credit Growth Revealed in Latest Survey

The latest survey by FICCI and the Indian Banks’ Association brings good news about the health of India’s banking sector. It shows that things are getting better with fewer bad loans and more loans being given out.

This survey looked at a big chunk of the banking industry, about 77%, to get a good picture. Even though the world economy had some tough times, India’s economy did quite well, growing by about 7.6% in 2023-24. This was because people and businesses were investing more, and factories were producing more.

The survey found that banks were giving out more loans, especially to people buying things like homes and cars. This is partly because it’s easier to do banking online now. Also, banks are in a good position to give out more loans because they don’t have many bad loans on their books.

The survey also showed that industries like building roads and bridges, making metal and steel, and processing food are getting a lot of loans. This is because these industries are important for the country’s growth.

Looking ahead, banks think they’ll keep giving out more loans, especially to businesses. They’re also expecting fewer people to put their money in regular savings accounts and more into accounts where they can’t take their money out easily.

One important thing the survey found was that fewer people and businesses are falling behind on their loan payments. Most banks said the number of bad loans had gone down in the last six months.

Overall, banks are feeling pretty good about the future. They think the percentage of bad loans will stay low in the next six months, which is a good sign for the economy. About half of the banks surveyed expect the bad loans to be between 3% and 3.5%.

Also Read: India’s Foreign Exchange Reserves Reach Highest Level in More Than Two Years