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Crisil Ratings in its report said has said that the credit growth is likely to moderate to 13-13.5 per cent this fiscal but will improve slightly to 13.5-14 per cent next financial year as the economic pace picks up. As per the report, the biggest factor driving the moderation is low demand in wholesale credit, which constitutes as much as 60 per cent of the overall credit. Wholesale credit is seen slowing to 11-11.5 per cent this fiscal from a decadal high of 15 per cent in 2022-23. A key monitorable, which will determine credit growth going forward, is the extent to which deposit growth picks up for banks. The retail credit demand will continue to go up in this fiscal but corporate credit demand is lagging, which is likely to pick up in the next fiscal on capex revival.
In absolute terms, overall bank credit stood at Rs 148 lakh crore in FY23, clipping at 15.9 per cent year-on-year, and this is likely to grow to Rs 168 lakh crore or 13-13.5 per cent this fiscal and further grow to Rs 191 lakh crore or 13.5-14 per cent in the next. According to the agency, the credit demand moderation this fiscal will be because of the following four key reasons -- gross domestic product growth is expected to fall to 6 per cent this fiscal from 7.2 per cent last fiscal, which will impact the overall credit growth. Secondly, the easing of inflation with some softening in commodity prices. A significant part of the growth in wholesale credit (comprising corporates and micro, small and medium enterprises) last fiscal was driven by higher working capital demand in a high-inflation environment.
Going forward, inflation levels are expected to be lower than the last fiscal. Thirdly, robust bond issuances in the first half of this fiscal with the changes in interest rates have seen a substitution of bank credit with debt capital, which also supported wholesale credit growth last year, especially in the first half. But this is not seen to the same extent this year. Finally, given the strong growth in fiscal 2023, especially in the second half, the high-base effect will also be a factor. The retail credit, which is 28 per cent of overall credit, is expected to continue to grow at a healthy rate of 19-20 per cent, similar to last fiscal.
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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