Latest news with #BFSIResearch
&w=3840&q=100)
Business Standard
12 hours ago
- Business
- Business Standard
Credit growth rose to 10% in July 25 fortnight, deposit growth at 10.2%
Credit growth in the fortnight ended 25 July inched up to 10 per cent year-on-year (Y-o-Y), while deposits during this period continued to outpace credit growth, rising 10.2 per cent Y-o-Y, latest data from the Reserve Bank of India (RBI) showed. During the same period last year, banking system credit grew 13.7 per cent, while deposits grew 10.6 per cent. In the previous fortnight (11 July), credit growth stood at 9.8 per cent and deposit growth was 10.1 per cent. In absolute terms, outstanding credit in the banking system stood at Rs 185.02 trillion in the fortnight ended 25 July, while outstanding deposits stood at Rs 233.50 trillion. During the fortnight, credit rose by Rs 31,979 crore, and deposits grew by Rs 23,573 crore. 'The credit and deposit growth is expected to linger around similar levels. In case of credit growth, retail credit growth is cooling down across segments barring gold loans. Also, the bond market is offering better yield — this has shifted corporate credit demand away from banks. On the other hand, banks are finding it difficult to source funds due to the alternative avenues available to customers,' said Saurabh Bhalerao, Associate Director and Head — BFSI Research, CareEdge. Rating agencies estimate credit growth this year (FY26) to be around 11.5–12.5 per cent, but there could be some revision to the projections.
&w=3840&q=100)
Business Standard
16 hours ago
- Business
- Business Standard
Credit growth rises to 10% in July 25 fortnight, deposit growth at 10.2%
Credit growth in the fortnight ended 25 July inched up to 10 per cent year-on-year (Y-o-Y), while deposits during this period continued to outpace credit growth, rising 10.2 per cent Y-o-Y, latest data from the Reserve Bank of India (RBI) showed. During the same period last year, banking system credit grew 13.7 per cent, while deposits grew 10.6 per cent. In the previous fortnight (11 July), credit growth stood at 9.8 per cent and deposit growth was 10.1 per cent. In absolute terms, outstanding credit in the banking system stood at Rs 185.02 trillion in the fortnight ended 25 July, while outstanding deposits stood at Rs 233.50 trillion. During the fortnight, credit rose by Rs 31,979 crore, and deposits grew by Rs 23,573 crore. 'The credit and deposit growth is expected to linger around similar levels. In case of credit growth, retail credit growth is cooling down across segments barring gold loans. Also, the bond market is offering better yield — this has shifted corporate credit demand away from banks. On the other hand, banks are finding it difficult to source funds due to the alternative avenues available to customers,' said Saurabh Bhalerao, Associate Director and Head — BFSI Research, CareEdge. Rating agencies estimate credit growth this year (FY26) to be around 11.5–12.5 per cent, but there could be some revision to the projections.
Economic Times
30-07-2025
- Business
- Economic Times
Is Bajaj Finance's decline a sign of looming crisis in India's NBFC sector?
Mumbai: A precipitate post-earnings decline in the stock of Bajaj Finance, India's biggest, pure-play non-bank lender by market value, has underscored rising stress in hitherto bankable sectors served by such companies, with analysts looking to the festive season for most borrowers to generate the necessary cash flows that would boost both NBFC asset quality and collection efficiencies. ADVERTISEMENT "We are seeing pockets of stress emerging in sectors like micro finance, personal loans, cards and also micro-SME loans," said Anand Dama, head, BFSI Research at Emkay Global Financial Services. "It is still not led by macro indicators. We expect this stress to continue in the second and third quarters at least, and hope that it does not deteriorate with the macro slowdown, which is difficult to predict as of now." While a marked improvement in banking system liquidity since last autumn has theoretically lowered the cost of NBFC financing and eased the pressure on the liabilities side of their balance sheets, the industry faces fresh challenges from the asset side now. A sizable section of microfinance loans has turned into non-performing assets-both at banks and NBFCs-and collection efficiencies have been under the lens due to the suspect repayment ability of a section of challenges are being felt even by top NBFCs, such as Bajaj Finance, which helped millions of Indians step on to the consumption ladder for the first time over the past decade. In the post-results analyst call last week, Bajaj Finance MD Rajeev Jain said that 13 of the 17 industries the company tracks in the MSME sector are showing signs of a slowdown, while three others are showing signs of contraction. ADVERTISEMENT "So, it's virtually a perfect storm in a way. (Our) MSME portfolio is (about) ₹50,000 crore, which is entirely unsecured. In that, principally, (loans to) doctors is ₹15,000 crore. Even there, we are seeing pressure. So this segment did not trouble us even in Covid actually. This segment is also suddenly troubled. We ran that for 15 years. It has always been 99% current kind of portfolio," Jain Bajaj Finance stock has fallen more than 8% in a week, with about 6% coming on the day after the earnings on Friday. ADVERTISEMENT Jain added that within MSMEs, the problem is with the business loans, and Bajaj Finance is "going hammer and tongs" to ensure that loan repayments are at pre-Covid levels for MSME as well non-MSME loans. Even for L&T Finance, another large NBFC, asset quality deteriorated with gross stage 3 loans due past 90 days at 3.31% in June 2025 from 3.14% a year ago. As a result, impairment costs increased 39% year on year to ₹542 crore from ₹390 crore a year Sudipta Roy described it as a challenging quarter. ADVERTISEMENT But analysts caution that the troubles in the MSME sector are limited to unsecured loans."If you see bank loans to the sector which are largely secured, they are performing well. So it is not a sector phenomenon right now. ADVERTISEMENT These are companies with ₹10 crore to ₹15 crore turnover and business cycles go up and down. The festive season is crucial. If consumption recovers then we could see stress abate or things will become worse," said Bunty Chawla, analyst at IDBI Capital. Analysts said the second half of the fiscal remains crucial as macroeconomic conditions are heavily dependent on a good monsoon and festive spending to improve both demand for loans as well as asset quality. (You can now subscribe to our ETMarkets WhatsApp channel)
The Hindu
15-05-2025
- Business
- The Hindu
NCLT gave nod for resolution plans to the tune of over ₹67,000 crore in FY2024-25 under bankruptcy law
As many as 284 resolution plans were approved under the Insolvency and Bankruptcy Code (IBC) in 2024-25, which would result in settlements to the tune of ₹67,176 crore in FY 2024-2025, which is about 42% highest than the ₹47,206 crore resolved through 275 resolution plans in 2023-2024, as per the data from National Company Law Tribunal (NCLT). India enacted the IBC, its first comprehensive bankruptcy law in 2016, to improve the overall corporate insolvency resolution process. The amount recovered through insolvency resolution in FY 2024-2025, is the second highest after ₹1,19,993 crore recovered in FY2018-19 from 81 cases, as per the data. As many as 1,346 companies were admitted for the corporate insolvency resolution process in 2024-25, when compared to 1,318 companies in 2023-2024. 'Higher levels of recoveries generally indicate that the code is generally better compared to other methods for resolution. However, we should also keep in mind that the data can be skewed by a few high value recoveries,' Saurabh Bhalerao, associate director, BFSI Research, Care Edge Ratings said. Further the amount has to be considered against the quantum of admitted claims of over ₹11 lakh crore (as of December 2024). This higher resolution can also be attributed to lower vacancy at the NCLT where new members have been added boosting its capacity as well as streaming of regulatory processes, he added. IBC has gained prominence in the past few years with a recovery rate of around 31%. Meanwhile, ongoing cases have hovered slightly below the 2,000-case mark for the last few years, Mr. Bhalerao said. However, the quantum of time required to resolve a case adequately remains elevated due to ongoing litigation at NCLT and other forums. Several measures are being contemplated to preserve the business value of the underlying asset and reduce the timeline (as faster resolutions typically generate higher recoveries), such as formal out-of-court solutions such as Mediation, an extension of the pre-pack resolution mechanism to larger firms (currently available for MSMEs), and insolvencies of group companies, he pointed out. A measure of the effectiveness of the IBC is the ratio of liquidation to resolution. With several initiatives to improve outcomes, the ratio has improved from 5.06 in FY18 to 1.32 in the nine months of FY25, Mr. Bhalerao added. EOM
