Bank credit grows 5%; deposits rise 11%

Bank credit grows 5%; deposits rise 11%

AgenciesUpdated: Monday, April 26, 2021, 08:36 PM IST
article-image
Bank credit grows 5%; deposits rise 11% | Pexels

Bank credit grew by 5.33 per cent to Rs 108.89 lakh crore, and deposits rose 10.94 per cent to Rs 152.15 lakh crore in the fortnight ended April 9, 2021.

In the fortnight ended April 10, 2020, bank advances stood at Rs 103.38 lakh crore and deposits were Rs 137.15 lakh crore.

In 2020-21 fiscal, bank credit increased 5.56 per cent and deposits 11.4 per cent.

Care Ratings in a recent report said the bank credit growth rate continues to decline, however, in absolute terms bank credit (in the fortnight ended April 9, 2021) increased by Rs 5.5 lakh crore as compared to the fortnight ended April 10, 2020, but declined by Rs 0.62 lakh crore from the previous fortnight ended March 26, 2021.

"In absolute terms, bank credit usually declines in the first month of the new financial year, as it is a lean period (this trend can be observed for the last five years)," the rating agency said.

However, the year-on-year growth rate has fallen in the first month of the new financial year (i.e., April 2021) for the first time in five years, reflecting subdued credit demand amid the rising second wave of the pandemic, the report said.

The agency said bank credit growth is likely to increase in FY22, given the growth in the economy and the base effect coming into play.

The downside risks include lockdowns in key states, which may impact the industrial as well as the service segments.

Another risk is the end of the Emergency Credit Line Guarantee Scheme (ECLGS) in June 2021, which had propped up the MSME credit.

However, the extension of the Targeted Long Term Repo Operations (TLTROs) and on-lending norms could support growth, the agency said.

RECENT STORIES

Bank Of India Faces ₹564 Crore Penalty From Income Tax Department; Yes Bank Also Hit With ₹113...

Bank Of India Faces ₹564 Crore Penalty From Income Tax Department; Yes Bank Also Hit With ₹113...

The Impact Of AI On Psychometric Testing

The Impact Of AI On Psychometric Testing

Shapoorji Pallonji Group's Afcons Infrastructure Files Draft Red Herring Prospectus For ₹7,000 Cr...

Shapoorji Pallonji Group's Afcons Infrastructure Files Draft Red Herring Prospectus For ₹7,000 Cr...

ICICI Securities' Retail Distribution Head Quits; Exchange Filing Reveals

ICICI Securities' Retail Distribution Head Quits; Exchange Filing Reveals

Exploring The Technological Foundation Of Harambe Token

Exploring The Technological Foundation Of Harambe Token