Share of loans bearing over 9% interest rate rose to 56.1% in March 2023 from 31.4% a year ago, data from RBI showed.
Retail loans have grown faster and share of large borrowers in gross advances have declined over last three years, RBI’s Financial Stability Report shows.
Bad debt from credit card receivables in private sector banks remained broadly flat at 1.9% while it was 1.8% for foreign banks, RBI’s Financial Stability Report said.
Banks see credit growth of 15.4% on 2 June 2023, according to RBI’s Financial Stability Report; deposit growth stands at 11.8%.
Indian economy makes solid recovery and is among fastest-growing large economies despite formidable headwinds, says RBI Governor Shaktikanta Das.
Despite sudden surge in liquidity, bank deposit rates are unlikely to fall while borrowing costs could continue to face upward bias in FY24, says India Ratings and Research.
RBI says compromise settlement with wilful defaulters has existed for more than 15 years; latest circular only aims at tightening existing norms.
Progress from pause to interest-rate cuts will depend on lot of variables; prediction of end to rate hike cycle is also fraught with risks, though popular view is that RBI will adopt pause policy for long.
Bankers fear RBI’s compromise settlement measure can lead to birth of new defaulters, spoil credit discipline and hurt integrity of banking system.
Reverse flow of Rs 2,000 notes to banking system will ease liquidity to certain extent but have little impact on deposit growth or interest rates, senior bankers said.
Several Indians in Gulf region complain that banks are refusing to accept their Rs 2,000 notes.
RBI says value and volume of banknotes in circulation increased during 2022-23, with Rs 500 notes enjoying highest share.
Number of fake Rs 500 denomination notes detected increases by 14.4% to 91,110 pieces in FY23 compared to year-ago period.
Rs 500 accounts for 77.1% of all notes in circulation by value and 37.9% by volume, according to RBI’s annual report.
While about Rs 14,000 crore has come in form of deposits, Rs 3,000 crore has been exchanged, SBI chairman Dinesh Khara said.
