Banks, finance companies expect robust festive season credit offtake

Little room for rate-cut wars; tight screening to stay

Lenders in India, comprising banks and finance companies, anticipate robust growth in retail credit during the upcoming festival season, stretching from September to December 2023. This expectation is based on resilient demand, government initiatives, and elections in key states.

Nonetheless, the possibility for interest rate wars remains limited due to the Reserve Bank of India’s (RBI’s) tight grip on liquidity. Concerns about potential impacts on margins and credit quality are also constraining such rate competition, observe bankers.

In the period between August and December 2022, amidst economic recovery and pent-up demand following the second wave of the pandemic, bank retail