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SBI Research Report
Incremental bank credit growth lost much of the momentum in August 2020.
The bad thing is that incremental bank credit that increased in June and July by Rs 392 billion declined in August by Rs 360 billion, which is mainly due to decline in credit to personal loan and infrastructure segments.
Credit to non-banking financial companies, however, jumped in August after three successive months of decline.
Simultaneously, our bottom up approach suggests that deposit and credit growth (extrapolated on the basis of sum of daily variations) during the current unlock four regime witnessed large declines, with the maximum decline in savings bank deposits and even bank deposits happening in unlock four across all lockdowns and unlock phases.
The consumer deleverage also declined in August indicating the stess of household balance sheets now emerging with gusto.
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