Term deposits pick up pace as customers chase higher interest rates
Some sectors like infrastructure, iron & steel and food processing are witnessing growth in long term credit demands. Major infrastructure development plans have been in place by the Government to facilitate quick capital spending with a strong multiplier effect and this is likely to spur demand for infrastructure financing, said the report. Bad loans on the other hand continue to show a positive trend as asset qualities improve. Bad loans showed a new decadal low to 3.2% as of September 2023, from 3.9% in March 23.
More than two thirds of the have seen an erosion in their low cost as chase higher , and demand is accelerating with the segment witnessing strong growth, showed a survey of bankers.``Customers’ search for higher rates and the ability to lock those interest rates for a longer time has led to a shift in favour of ,’’ said the FICCI-IBA Survey of Bankers. ``Term deposits have picked up pace. Around 70% respondents have reported a decrease in the share of CASA deposits in total deposits.’’
Some sectors like infrastructure, iron & steel and food processing are witnessing growth in long term demands. Major infrastructure development plans have been in place by the Government to facilitate quick spending with a strong multiplier effect and this is likely to spur demand for infrastructure financing, said the report.
``Infrastructure is witnessing an increase in credit flow with 82% of the respondents indicating an increase in long term loans as against 67% in the previous round. The survey suggests that the outlook for non-food industry credit over next six months is optimistic,’’ it said.
on the other hand continue to show a positive trend as asset qualities improve. Bad loans showed a new decadal low to 3.2% as of September 2023, from 3.9% in March 23.
Majority of banks expect bad loans to be in the range of 3% to 3.5% over the next six months. “Some of the sectors that may continue to show NPAs over next six months include Textiles and garments, MSME, Agriculture and Gems & Jewellery”, it said.
Source: Stocks-Markets-Economic Times
