Indian banking system faced major headwinds in FY19 which kept the overall economy under pressure for most part of the year.
The public sector banks can be expected to focus on increasing CASA, with the aim of curtailing costs and containing level of non-performing assets (NPAs). The steps should be taken for concentrated growth with profitability.
Overall, the banks ended FY19 with strong disbursement numbers that rose in double digits for the second year in a row, after the slow growth in earlier fiscals. The overall banking credit rose 13.24 per cent to 97.67 lakh crore, while deposits grew by 10 per cent to 125.72 lakh crore during the same period.
On a YoY basis, non-food bank credit rose by 13.2 per cent in FY19 as compared with an increase of 9.8 per cent for FY18. Loans to the services sector doubled with a 23.7 per cent growth to 14.2 per cent in the same month last year. The advances to agriculture and allied activities increased by 7.5 per cent and to the industry advances rose by 5.6 per cent.Advances to infrastructure, chemical and chemical products and all engineering sectors too gained in pace. However, the credit growth to basic metal and metal products, textiles and food processing dropped. Personal loans rose 16.7 per cent in FY19.
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