Icra sees bank credit growth slowing to 15-16% in FY27 as rates rise

Credit growth is projected to ease to 15-16% for FY27, impacted by hardening policy rates. Fresh slippages for public sector banks are estimated to increase to ₹1 lakh crore in FY27. Private banks may experience fresh slippages amounting to ₹1.3 lakh crore. While banks’ asset quality may deteriorate slightly, net interest margins should improve. The overall banking sector faces challenges amid these credit growth expectations and market conditions.

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