Chennai, Oct 14 : With economic growth happening in the country, the Indian banking sector is expected to log good credit growth this fiscal. The Reserve Bank of India (RBI) has projected India's Gross Domestic Product (GDP) to grow at 6.5 per cent in Financial Year (FY) 24. Interestingly, the International Monetary Fund's (IMF) GDP projection for India at 6.3 per cent has come closer to the RBI's figure. The credit rating agency, CARE Ratings, in its latest report said the outlook for bank credit off take is positive for FY24, owing to economic expansion and continued push for retail credit, which has been supported by improving digitization. CARE Ratings estimates that credit growth is likely to be in the range of 13-13.5 per cent for FY24, excluding the impact of the merger of HDFC with HDFC Bank. The personal loan segment is expected to perform well compared to the industry and service segments in FY24. Furthermore, as the Credit to Deposit (CD) ratio remains elevated, growth in the liability franchise would play a significant role in sustaining loan growth. However, elevated interest rates and global uncertainties could potentially impact credit growth in India, CARE Ratings said. According to the credit rating agency, the credit off take over the last 12 months expanded by Rs. 25.2 lakh crore to reach Rs. 151.5 lakh crore as of September 22, 2023. This growth continues to be primarily driven by continued demand for personal loans and Non-Banking Financial Companies (NBFCs). The RBI, in its survey, has said that bankers are optimistic on overall loan demand during Q3FY24. According to the RBI, the higher demandfor loans is expected from mining, infrastructure and personal/retail sectors. Existing loan terms and conditions are expected to prevail during Q3FY24, with more easing for retail/ personal loans. As to the expectations for Q4FY24 and for Q1FY25, the bankers are upbeat on loan demand across the major categories of borrowers with some seasonal moderation in Q1FY25. Marginal easing of loan terms and conditions are expected in Q4FY24 and Q1FY25, the RBI survey notes. As regards deposits, it is expected to grow in FY24 as banks look to shore up their liability franchise and ensure that deposit growth does not constrain the credit off take, CARE Ratings said. The optimism comes from the fact that the Indian manufacturing sector expects improved production, a better order book position,higher capacity utilisation and overall business situation. Reflecting the broad-based optimism, the Business Expectations Index (BEI) for Q3FY24 improved to 135.4 from 132.5 in the previous quarter, notes the RBI survey. For Q1FY25, the manufacturers remain highly optimistic on production, order books, capacity utilisation and the overall business situation. Input cost pressures are likely to persist for manufacturers, but they also expect pricing power to pass on the rise in selling prices, states the RBI survey. /IANS