Financialisation o of Household Savings Accelerates, PSBs Gain Credit Share: SBI Report
The share of equities in Indian household savings has doubled from 2.5% in FY20 to 5.1% in FY24, reflecting rising financialisation, according to an SBI Research report. It noted structural shifts in the credit market, urging close monitoring of household deposits as a key credit source.
Public sector banks (PSBs) are projected to grow at 12.2% in FY25, slightly below FY24’s 13.6%. However, their share in incremental credit has surged to 56.9% in FY25 from just 20% in FY18. PSBs now hold 52.3% of outstanding credit, reversing a long-term decline.
Thanks to the government’s 4R strategy, banking system asset quality improved significantly, with gross NPAs at a record low of 2.6% in H1 FY25.
Sectoral credit trends show moderation, with reduced lending to services and agriculture. The MSME sector stands out, growing 17.8% YoY. Meanwhile, private credit deals rose 7% to ₹774 billion in FY24, driven by Alternative Investment Funds and NCDs.
