Domestic rating agency Crisil on Tuesday said the banking system’s credit growth will drop by 2 percentage points to 14 per cent in financial year 2024-25.
The slowdown will be due to lower GDP growth at 6.8 per cent in FY25, as against 7.6 per cent in FY24, RBI measures like higher risk weights on unsecured loans and also a high base, the agency said.
Slower deposit accretion can keep a check on credit growth, the agency said, admitting that the differential between the deposit and credit growth has reduced over the past year.
It said financial year 2024-25 witnessed a 16 per cent growth in bank credit, if one were to exclude the impact of the HDFC merger, and attributed the same to strong economic activity and higher retail demand.
Although the data did not explicitly mention Apple, the company is the dominant foreign phone maker in China’s smartphone market. This suggests that the increase in foreign-branded shipments can be attributed to Apple’s performance.
Apple’s shipments in China increased by 12% in March, marking a significant improvement from the first two months of 2024, when the company experienced a 37% slump in sales.
Sales may see a further boost in May as Apple launched an aggressive discounting campaign this month on its official Tmall site in China, offering discounts of up to 2,300 yuan ($318) on select iPhone models.
“This fiscal growth will be tempered by a high base effect, a revision in risk weights and a somewhat lower gross domestic product (GDP) growth,” the agency said.
It was quick to add that the fundamental drivers of credit demand are broadly intact and a revival in private corporate capital expenditure (capex), especially towards the second half of fiscal 2025, can provide tailwinds as well.
The corporate segment, which accounts for 45 per cent of the overall loans, is estimated to maintain the growth at 13 per cent in FY25, it said, adding retail growth will slow