Bankers said that while the imposition of lockdowns and other mobility restrictions had hard hitting on disbursements in the first two months of FY22, the recovery was swift.
Credit card spends declined in April and May but improved to March levels in June, driven by spends in categories like consumer durables, utilities, education and insurance,” Bakhshi said. ICICI Bank’s retail loan portfolio, excluding business banking, grew by 20.2% year-on-year and was flat sequentially as on June 30, 2021.
The trend in loan growth was better in the first four months of FY22 than in the first four months of the pre Covid year FY20. Between March 29 and August 2, 2019, outstanding loans in the banking system had fallen 0.66%. The first half of the financial year typically sees muted loan growth before the busy season begins with the festive season.
Utilization of working capital limits has also improved. State Bank of India (SBI) chairman Dinesh Khara said earlier this month that the level of under-utilisation in the bank’s commercial client group dropped to 25% in Q1FY22 from about 30% in the previous quarter.
At the same time, lenders have been cautious while guiding for full-year credit growth. SBI said it expects a 9% growth in FY22 and Khara said credit growth will be a function of the real economy.
He added, "We are only waiting for the opportunity to support credit growth, but it will emanate from borrowers and the real economy."