Mumbai: Growth in non-food credit offtake from commercial banks slowed to 10.19 per cent at Rs 65,24,257 crore for the fortnight ended March 6, according to Reserve Bank of India (RBI) data released here today. On the other hand, banks deposits continue to outpace credit growth by rising 11.62 per cent to Rs 85,54,045 crore in the period, as against Rs 76,63,535 crore in the same period last year.
Advances of banks had stood at Rs 59,20,762 crore during the corresponding period of last year. Most banks have seen muted loan growth this year since the economy is yet to pick up. The country’s largest lender State Bank of India sees a credit growth of 10 per cent in the current fiscal.
“One of the reasons for muted credit growth is that corporates are raising funds from the commercial paper market where rates are lower than base rate,” ICRA analyst Vibha Batra said. “We expect a muted credit growth for this year, in the range of 12-13 per cent, but more towards the lower end of the range,” she said.
According to ICRA, deposit growth is likely to be in the range 11.5 per cent to 13 per cent in FY15. Demand deposits grew 14.13 per cent to Rs 7,97,101 crore, as against Rs 6,98,356 crore in the year-ago period, while time deposits rose 11.36 per cent at Rs 77,56,941 crore from Rs 69,65,179 crore.
In the quarter ended December, bank credit slowed to 10.1 per cent, as against 14.2 per cent growth registered in the year-ago period. Deposits grew by 10.9 per cent in the third quarter, which was slower than 15.4 per cent growth registered in the year-ago quarter.