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Scope for Credit growth to Outpace Economy - RBI
According to the RBI, India’s Credit- to- GDP ratio was 90.1% in 2022, indicating potential for Higher Credit growth Compared to Advanced and Emerging markets. This growth can boost Economic development. The analysis also find that income Growth Positively impact Bank Deposits.
MUMBAI: There is scope for bank credit to outpace growth of the economy given the relatively low share of credit to GDP, according to RBI.
"India's total credit-to-GDP ratio (including credit extended by banks as well as NBFCs) at 90.1% in 2022 was below that of advanced economies and of emerging market economies (EMEs) as well as the estimated threshold (of 113.1%). As such, higher credit growth remains supportive of economic growth," RBI said in its report on Trend and Progress of Banking in India. The report includes a cross-country analysis of credit-to-GDP ratio, concluding that higher credit growth in India remains supportive of economic growth. A separate analysis on deposits has concluded that income growth has a significant positive impact on bank deposits.
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