CREDIT GROWTH SLOWDOWN BANKING SECTOR
Investment depression inevitable consequence of Modi govt's policies of suppression: Congress
The Congress party asserts that India's economic growth is hampered by the Modi government's oppressive policies, leading to sluggish private corporate investment despite tax cuts and production-linked incentives. Jairam Ramesh highlights stagnant wages, a distorted GST structure, and growing inequalities as factors holding back demand growth and discouraging corporate investment due to a climate of fear and insecurity.
Deposits grew faster than credit amid cautious economic activities
Deposit mobilisation by banks saw a rise of 10.4% year-on-year till June 13. This growth surpassed the credit expansion of 9.6%. Consequently, the credit-deposit ratio for banks declined. Fixed deposit mobilisation increased due to expectations of deposit rate cuts. Reserve Bank of India reduced the repo rate. Banks' credit grew 9.6% year-on-year as of June 13.
JSW One eyes IPO in 18-24 months, targets break-even this fiscal
JSW One Platforms, the B2B ecommerce arm of JSW Group, is gearing up for an IPO in the next 18-24 months, following in the footsteps of peers like Zetwerk and Infra Market. The company aims to break even this year and will begin engaging with investment bankers in the next financial year.
Finance Minister nudges PSU banks to raise credit growth, maintain profitability
Finance Minister Nirmala Sitharaman urged public sector banks to leverage the RBI's 50 bps rate cut to boost lending to productive sectors, aiming to sustain profitability momentum. PSBs reported a record cumulative profit of Rs 1.78 lakh crore in FY25. Banks are directed to maintain credit growth and enhance financial inclusion through government schemes while managing asset quality.
Expect positive trend as benefits of rate cuts & consumption boost trickle down: Anand Radhakrishnan
Anand Radhakrishnan of Sundaram Mutual Fund suggests that rate cuts are poised to stimulate both listed and unlisted companies by enhancing liquidity and credit access. Consumption is expected to rise, fueled by tax relief, lower interest rates, and potential wage growth. The US may moderate tariffs to pave the way for rate cuts, potentially boosting economic growth.
India's banks will lend. Will tycoons like Adani and Ambani borrow?
India's workforce is large, but investment is lacking. Private sector expansion is low. Banks are less exposed to key industries. The Reserve Bank of India is trying to boost lending. Tycoons are distracted by their own issues. Smaller companies are still cautious. A US-India trade deal could help exports. Private credit is currently favored.
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BFSI to metal: Pankaj Pandey’s sector playbook for Nifty’s run to 27,000
As market earnings normalise, Pankaj Pandey of ICICIdirect.com sees Nifty heading to 27,000, driven by a bullish stance on BFSI, capital goods, and infrastructure. With central capex up nearly 60% and FII sentiment improving, he believes PSU banks, steel, cement, and real estate are well-positioned to benefit. However, he advises caution in digital and consumption plays where valuations remain stretched.
Sales cheer for India Inc, but recovery still uneven
While manufacturing saw improvements in sectors like automobiles and pharmaceuticals, it faced setbacks in petroleum and metals. The services sector, particularly non-IT, demonstrated robust growth, but rising input and staffing costs pose significant challenges, impacting profit margins.
Loans to MSMEs increase to over Rs 40 lakh crore on back of policy push
Public sector banks continued to lead in micro business lending with 45% market share while private banks dominated the small and medium business segments, the credit bureau said on Thursday, unveiling a MSMEx (micro, small and medium exposure) Spotlight Report.
Now, give credit where credit's due
As leaders convene in Seville, reforming the credit-rating system to prioritize developing countries' needs is crucial. The current system, dominated by a few agencies, unfairly increases borrowing costs for these nations. Regulations like Basel 4 and IFRS 9 further discourage investment in vital sectors like agriculture and climate adaptation, hindering development and perpetuating inequality.
RBI rate cuts to revive slow credit growth in FY26
India Ratings and Research anticipates a rebound in banking sector credit growth, spurred by the Reserve Bank of India's rate cuts. While credit growth slowed to 9.9% in April 2025, IndRa projects a rise to 13%-13.5% for the current fiscal year. This growth will be supported by private capex revival, even as lending to NBFCs and the retail sector slows.
Where should you pick stocks within strong structural trends? Dhiraj Agarwal explains
Dhiraj Agarwal highlights promising sectors like defence, renewable energy, and microfinance, driven by increased spending and evolving economic conditions. He emphasizes selective stock picking, focusing on companies with strong financials and reasonable valuations. Agarwal anticipates an economic turnaround in the second half of the year, contingent on resolving trade uncertainties and increased private sector capex.
Strong earnings recovery expected in H2, seeing rotation in IT, banks: Dhiraj Agarwal
Dhiraj Agarwal from Ambit Investment Managers notes Indian market optimism despite weak earnings. A strong recovery is expected in the second half, extending into FY27. Investors prioritize long-term prospects. Performance varies across sectors, with IT second liners outperforming mega-caps. Rotation from PSU to private banks is observed due to economic slowdown. US markets show strength despite concerns.
ETMarkets Smart Talk: Generative AI, defence, and semiconductors among top themes for 2H2025, says Saurabh Pathak
Saurabh Pathak of Purnartha PMS is optimistic about India's growth in H2 2025, highlighting Generative AI, Defence, and Semiconductors as key investment themes. Despite geopolitical volatility, India's strong domestic growth, resilient consumption, and government capex support a constructive outlook. Pathak advises staggered investments, favoring IT, Pharma, and Utilities sectors.
PSU Banks' share in certificates of deposits issuance rises to 69% from 6% in three years
Public sector banks increased certificate of deposit issuance since 2022. Their market share rose significantly. Private banks initially led CD issuance during Covid. PSBs dominated after February 2022. Liquidity drives CD issuance. CD issuance reached a high in early 2025 due to credit demand. Private banks have longer CD tenors. PSBs use CDs for short-term funding.
Digital lending startups put off IPO plans amid muted growth
Digital lending startups experienced slower growth in FY25 due to rising expenses, tighter regulations, and worsening credit quality, potentially delaying IPO plans for some. While companies like Moneyview and Kissht are preparing for regulatory filings, Kreditbee's profit growth was muted despite revenue increase. Fibe, however, nearly doubled its net profit, contrasting with Axio's pre-provisioning profit decline.
Indians with ticket to travel give credit card spends a boost
Credit card spending saw a boost in May, reaching ₹1.9 lakh cr. This marks an increase from the previous year. New card issuances also rose, hitting a four-month high. Transaction volumes increased significantly. HDFC Bank and SBI Cards led in new card issuances. However, some lenders like ICICI Bank and RBL Bank experienced a decline in their card base.
These 8 banking stocks can give more than 20% returns in 1 year, according to analysts
While many on the street believe that it is the interest rate cycle which plays an important role in how the bottom lines of banks shape up, the fact is that it is overall economic growth which matters most to banks. Banks provide the lifeline of capital to all the sectors of any economy. When these sectors do well, banks have higher credit growth. And which is the first sector which gives an indication that things are improving? None other than the auto sector.
RBI eases priority lending norms for SFBs, unlocks Rs 41,000 cr for low-risk sectors
The Reserve Bank of India’s decision to reduce the priority sector lending (PSL) target for small finance banks (SFBs) from 75% to 60% of adjusted net bank credit (ANBC) is expected to release around ₹41,000 crore, according to CareEdge. This capital can now be redirected to lower-risk segments like housing, secured retail, and MSME loans.
Accenture Q3 numbers show road’s still bumpy for IT companies
Accenture's latest financials signal a demand slowdown for Indian software outsourcing. Deal bookings have weakened amid uncertainty. New bookings declined for the second quarter. Headcount also saw a significant drop. Indian IT stocks reacted negatively. Analysts anticipate AI and BFSI to drive future demand. Accenture maintains a healthy book-to-bill ratio. Revenue guidance remains moderate, impacted by currency movements and tariffs.
Not the time to pick favourites: Viraj Gandhi's case for buying multi-asset funds
Amidst geopolitical tensions and inflationary pressures, SAMCO Mutual Fund advises investors to adopt a multi-asset strategy. The Indian market demonstrates resilience with strong economic fundamentals, but a cautious approach is recommended in the short to medium term. Pharma and private sector banks offer promising risk-adjusted returns, emphasizing diversification to navigate market volatility.
ETMarkets Smart Talk: Success Mantra! Beyond traditional equities - hybrid funds, global assets key for long-term investors, says Harshad Patil
Harshad Patil from Tata AIA Life Insurance suggests investors diversify beyond traditional equities to navigate market volatility and geopolitical uncertainties. He highlights India's strong economic growth and the potential benefits of rate cuts. Patil also emphasizes alpha-focused strategies and global diversification for long-term wealth creation, with upcoming dollar-denominated products.
Retail credit grows at slower pace in Q4 of FY25: Report
The retail credit market experienced a slowdown in the last quarter. New loan originations grew at a slower pace. This happened despite the Reserve Bank of India reducing its lending rate. Younger consumers showed muted demand. Credit card delinquencies declined. There was a preference for higher-value loans. High-ticket home and two-wheeler loans saw increased interest among lenders.
Strong FY25 financial performance supports standalone credit profiles of banks: Fitch
Fitch Ratings highlights the robust financial performance of Indian banks in fiscal year 2025. This strengthens their credit profiles and sets the stage for expansion. The sector shows improved asset quality and strong capital. Public sector banks' net profit reached a record high. State Bank of India contributed significantly to the total earnings. Steady performance is expected to continue.
Predict, Prescribe, Prosper: Unlocking the power of data and AI in public sector banks
India's booming digital economy, propelled by initiatives like Digital India and UPI, presents a data goldmine for public sector banks. These banks are urged to move beyond traditional analytics and embrace AI to unlock growth, particularly in SME lending.
Rs 1 lakh crore FII selloff in 6 sectors! Are you still holding the wrong stocks?
Foreign institutional investors have aggressively sold off nearly ₹1 lakh crore in Indian equities across six key sectors, including IT and FMCG, over the past six months. This pullback reflects concerns about high valuations, global macro uncertainties, and potential earnings downgrades. Telecom and financials are notable exceptions, attracting FII inflows amidst this broad de-risking trend.
ETMarkets Smart Talk: Shift debt allocation to short-term funds, maintain equity focus for stronger returns: Kush Gupta
Kush Gupta of SKG Investment & Advisory predicts improved market momentum in H2 2025 amid rate cuts, earnings recovery, and sectoral strength in BFSI, Defence, and Infrastructure. He advises strategic asset shifts toward equities and short-term bonds.
Indian Banks' earnings growth forecast halved amid economic caution and high deposit costs
Indian banks are facing a significant slowdown in earnings growth, potentially halving to 6.5% in FY26 due to a cautious economy and reduced core profits. Muted credit demand, high deposit costs, and RBI's measures to control unsecured lending contribute to this deceleration. However, a rebound to 16.1% is expected in FY27 with anticipated rate cuts and improved demand.
Lending yields set to shrink in FY26 as banks play it safe
Mumbai banks anticipate lower lending yields this fiscal year. Caution in unsecured loans and slower retail growth contribute. Policy rate cuts also play a role. Analysts predict a yield drop to 8.6%. Net interest margins may contract. Repricing of loans linked to external benchmarks will impact private banks. Deposit repricing lags will further squeeze margins.
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