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Credit growth in FY22 to be in low double-digit: Care Ratings
Jun-21-2021

Care Ratings has said that the credit growth for current financial year (FY22) is likely to remain in low double-digit on the back of muted economic activity. The slowdown in economy can further delay anticipated pick-up in credit growth apart from the likely impact on asset quality.

However, it said the sector's medium-term prospects look promising with diminished corporate stress and increased provisioning levels across banks. The bank credit growth rate has been marginally lower when compared with previous fortnight and remained largely stable compared to period ended March.

It stated this can be ascribed to risk aversion and regional lockdown imposed by states this year to curb the spread of coronavirus amid the second wave of pandemic that started in April and continued in May. However, many states have declared relaxation in lockdown or imposed partial lockdown in June. The result of this on bank credit will be known after reviewing the additions in bank credit by June-end.

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