New Delhi: The finance ministry on Thursday claimed public sector banks disbursed loans worth 2.53 trln rupees, including 1.52 trln rupees of new loans, in October during the 'outreach programmes' conducted in two phases last month.
However, the finance ministry's data on loan disbursals by public sector banks varies massively from the bank credit data released by the Reserve Bank of India.
The loan outreach programmes were announced in September by Finance Minister Nirmala Sitharaman to ensure adequate credit flow ahead of the busy festival season. The first programme was held in the first nine days of October, while the second was held from Oct 21 to Oct 25.
On Thursday, the finance ministry said the data on public sector banks' total disbursals include those made outside the camp and during the entire month.
But, as per latest data from the RBI, total credit given by scheduled commercial banks was up only 806.63 bln rupees between Sep 27 and Nov 8.
The large difference in the numbers released by the finance ministry and the RBI is particularly noteworthy since the central bank's data includes private and foreign banks in addition to public sector banks. And, while Sitharaman had invited private banks to participate in the outreach programmes, the data provided is for public sector ones.
As such, the finance ministry's data is arrived at after putting together the credit given by fewer banks. Yet, it exceeds the credit given by scheduled commercial banks by more than 1.5 trln rupees.
Of course, the finance ministry's figure would be the gross credit disbursed by public sector banks in October, while the RBI's data refers to outstanding bank credit, or loans given over a period less any repayments.
The difference between the two figures, however, remains inexplicably large.
Moreover, the 2.5-trln-rupee outreach programme should undeniably show up as a jump in the overall credit growth numbers. But, on the contrary, banks' credit growth on a year-on-year basis was at its lowest in two years as on Nov 8, falling to 8.1%.
As on Sep 27, bank credit was up 8.8%.
An explanation for the massive divergence could be that the loans may not have been entirely disbursed, only sanctioned, by public sector banks during the outreach programmes.
Once a loan is sanctioned, banks must make certain checks and verifications before disbursing the loan. Therefore, the amount disbursed could be lower than the sanctioned amount.
If the government has passed off the sanctioned amount as loans disbursed, it would mean the extent to which the outreach programme may have been successful has been misrepresented.
