Indian banks' loan growth to fall to 6%, the slowest since 1962

Banks are hit hard by the demonetisation aftermath.

According to Reuters, India's shock move to abolish high-value banknotes was expected to deliver a windfall to lenders, and banks have indeed seen coffers swell after people deposited 12.4 trillion rupees($183 billion) in cash into the system.

But while banks may benefit in the longer term, so-called "demonetization" has hit them hard in the immediate aftermath, with demand for credit plummeting and additional costs incurred to make the transition.

Jefferies, a brokerage, expected banking sector loan growth to fall to 6 percent in the year to March. That would make it the slowest since 1962, according to Reuters calculations. 

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