Credit growth to moderate in H2, FY27: Icra

Credit growth in India is expected to slow down in the second half of the current fiscal year and in the next fiscal year, according to a report by Icra. This moderation in credit growth is attributed to the recent increase in policy interest rates, which has made borrowing more expensive. The report also forecasts an increase in fresh slippages for public sector banks and private banks, potentially impacting their asset quality.

Why it matters

Credit growth is projected to ease due to hardening policy rates, and fresh slippages for public sector banks are estimated to increase. This could reduce lending and borrowing, and impact India's economic growth.

Market impact

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