India's banking system could face liquidity challenges if credit growth continues to outpace deposits.
Bankers are prioritizing raising deposits to keep credit costs low, according to a FICCI-IBA survey.
The survey, conducted between January and June, highlights continued growth in long-term credit demand for sectors like infrastructure, metals, and engineering.
Infrastructure is seeing an increase in credit flow, with 77% of respondents reporting a rise in long-term loans.
The increase in infrastructure credit is linked to the government's push for capital expenditure.
62% of banks expect non-food industry credit growth to be above 12% over the next six months.
Customers are shifting to high-cost deposits, preferring higher-yielding investments and locking in rates for longer periods.
67% of respondent banks reported a decline in the share of CASA (Current Account Savings Account) deposits in their total deposits.
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