Economic Survey 2023-24: India’s Credit Growth Remains Robust! Over 75 Million Have Credit Cards

Union Finance Minister Nirmala Sitharaman tabled the Economic Survey of India 2023-24 today in Parliament, commencing the Budget Session for this fiscal year (FY 2024-25). The economic survey shed key highlights on the credit growth in India during the fiscal year 2023-24. The survey noted that personal loans and NBFCs have the largest share of credit disbursed by banks. Within personal loans, housing loan growth remained range-bound during FY24, showing signs of improvement in April and May 2024. The survey noted that the deposit growth has gained momentum due to the transmission of previous rate increases, resulting in the repricing of deposits and higher accretion to term deposits. Lending by non-banking financial companies (NBFCs) accelerated, led by personal loans and loans to the industry while their asset quality has shown improvement.

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Credit Disbursal For Housing & Personal Loans

The survey showed that credit disbursal for housing loans surged from Rs 19.9 lakh crore in March 2023 to Rs 27.2 lakh crore in March 2024. Credit growth in personal loans surged on the back digitalisation of the financial ecosystem with increased use of credit bureaus for faster decisions, data collation and validation, and e-commerce transactions, the finance ministry said.

The personal loan growth segment moderated after December 2023 due to increased capital requirements for unsecured personal loans, credit cards, and lending to NBFCs by the RBI from 100 per cent to 125 per cent, the survey showed.

As per the data presented in the report, around 77 million Indians have credit cards as of July 2024.

Growth in Agriculture Credit

Bank credit growth maintained momentum during the ongoing financial year, with broad-based growth across various sectors. Credit disbursal by SCBs stood at Rs 164.3 lakh crore, growing by 20.2 per cent at the end of March 2024, compared to 15 per cent growth in the year-ago period. The trend continues in FY25, as reflected in a 19 per cent and 19.8 per cent YoY growth in bank credit in April and May 2024.

Growth in credit to agriculture and allied activities doubled digits during FY24 wherein agricultural credit had increased nearly 1.5 times from Rs 13.3 lakh crore in FY21 to Rs 20.7 lakh crore in FY24.

The survey noted that the Kisan Credit Card (KCC) scheme provided timely and hassle-free credit to farmers, with over 7.4 crores of operative KCC accounts at the end of 2023. Credit disbursals to the agricultural sector continued in April and May 2024 with an uptick mark. Additionally, bank credit to agriculture and allied sectors continued to grow by 19.7 per cent and 21.6 per cent YoY, respectively.