'Scope for credit growth to outpace economy,' says RBI

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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