Fitch Ratings Bank of India said on Monday Credit The current financial year will see strong growth despite the impact of higher interest rates. It said stronger loan growth should benefit net revenue, especially when combined with a wider net interest margin.

“We see Bank Credit expansion is around 13 per cent in FY23, higher than 11.5 per cent in FY22. The acceleration will be driven by normalization of economic activity following the COVID-19 pandemic and higher nominal GDP growth, which we expect to boost demand for retail and working capital loans, Fitch said in a statement.

Fitch has projected India’s real GDP growth at 7 per cent in 2022-23. It added that Indian banks are generally open to raising additional capital to fund growth, despite rate hikes.

“Private banks are generally better than state banks Capital Fitch said, however, that fresh equity-raising moves are likely to be opportunistic and incremental. Liquidity The buffers collapse in their pursuit of credit growth.

Fitch expects system deposits to grow at 11 per cent in the current and next fiscal, slower than loan growth.

Deposit rates may go up keep Some pressure on banks’ margins, but we expect credit costs to come down in FY23 to ease pressure on profitability, including the valuation effect of higher rates on investment.”